area handbook series 

Chile 

a country study 




Chile 

a country study 



Federal Research Division 
L ibrary of Congress 
Edited by 
Rex A. Hudson 
Research Completed 
March 1994 




On the cover: A figure (lukutuel) from a seventeenth-century 
Mapuche woman's belt called nimintraruwe 



Third Edition, First Printing, 1994. 

Library of Congress Cataloging-in-Publication Data 

Chile : a country study / Federal Research Division, Library of 
Congress ; edited by Rex A. Hudson. — 3rd ed. 

p. cm. — (Area handbook series, ISSN 1057-5294) 
(DA pam ; 550-77) 

"Supersedes the 1982 edition of Chile : a country study, edited 
by Andrea T. Merrill." — T.p. verso. 
"Research completed March 1994." 

Includes bibliographical references (pp. 381-417) and index. 
ISBN 0-8444-0828-X 

1. Chile. I. Hudson, Rex A., 1947- . II. Library of Con- 
gress. Federal Research Division. III. Series. IV. Series: 
DA pam ; 550-77. 
F3058.C5223 1994 94-21663 
983— dc20 CIP 



Headquarters, Department of the Army 
DA Pam 550-77 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, D.C. 20402 



Foreword 



This volume is one in a continuing series of books prepared by 
the Federal Research Division of the Library of Congress under 
the Country Studies/ Area Handbook Program sponsored by the 
Department of the Army. The last two pages of this book list the 
other published studies. 

Most books in the series deal with a particular foreign country, 
describing and analyzing its political, economic, social, and national 
security systems and institutions, and examining the interrelation- 
ships of those systems and the ways they are shaped by cultural 
factors. Each study is written by a multidisciplinary team of social 
scientists. The authors seek to provide a basic understanding of 
the observed society, striving for a dynamic rather than a static 
portrayal. Particular attention is devoted to the people who make 
up the society, their origins, dominant beliefs and values, their com- 
mon interests and the issues on which they are divided, the nature 
and extent of their involvement with national institutions, and their 
attitudes toward each other and toward their social system and 
political order. 

The books represent the analysis of the authors and should not 
be construed as an expression of an official United States govern- 
ment position, policy, or decision. The authors have sought to 
adhere to accepted standards of scholarly objectivity. Corrections, 
additions, and suggestions for changes from readers will be wel- 
comed for use in future editions. 

Louis R. Mortimer 
Chief 

Federal Research Division 
Library of Congress 
Washington, DC 20540-5220 



iii 



Acknowledgments 



The book editor would like to thank the chapter authors for 
reviewing and commenting on various chapters. Their expertise 
contributed greatly to the overall quality of the book. 

The authors are grateful to individuals in various agencies of 
the United States government, international organizations, private 
institutions, and Chilean diplomatic offices who offered their time, 
special knowledge, or research facilities and materials to provide 
information and perspective. None of these individuals, however, 
is in any way responsible for the work of the authors. 

Thanks also go to Ralph K. Benesch, who oversees the Coun- 
try Studies/Area Handbook Program for the Department of the 
Army. In addition, the book editor would like to thank members 
of the Federal Research Division who contributed directly to the 
preparation of the manuscript. These include Sandra W. Meditz, 
who reviewed all textual and graphic materials, served as liaison 
with the sponsoring agency, and provided numerous substantive 
and technical contributions; Marilyn L. Majeska, who managed 
editing; Andrea T. Merrill, who edited the tables, figures, and Bib- 
liography and managed production; and Barbara Edgerton and 
Izella Watson, who did the word processing. Thanks also go to 
Vincent Ercolano, who performed the copyediting of the chapters; 
Cissie Coy, who performed the final prepublication editorial review; 
and Joan C. Cook, who compiled the index. Linda Peterson and 
Malinda B. Neale of the Library of Congress Printing and Process- 
ing Section performed the phototypesetting, under the supervision 
of Peggy Pixley. 

David P. Cabitto provided invaluable graphics support, includ- 
ing preparation of several maps and the cover and chapter illus- 
trations. He was assisted by Harriett R. Blood, who prepared the 
topography and drainage map, and by the firm of Greenhorne and 
O'Mara. 

Finally, the book editor acknowledges the generosity of the in- 
dividuals and the public, private, diplomatic, and international 
agencies who allowed their photographs to be used in this study. 



v 



Contents 



Page 

Foreword iii 

Acknowledgments v 

Preface xiii 

Table A. Chronology of Important Events xv 

Country Profile xix 

Introduction XXXV 

Chapter 1. Historical Setting 1 

Paul W. Drake 

PRE-COLUMBIAN CIVILIZATIONS 6 

CONQUEST AND COLONIZATION, 1535-1810 7 

Politics and War in a Frontier Society 7 

The Colonial Economy 10 

Bourbon Reforms, 1759-96 11 

WARS OF INDEPENDENCE, 1810-18 13 

CIVIL WARS, 1818-30 14 

ARISTOCRATIC REPUBLICANISM, 1830-91 16 

The Conservative Era, 1830-61 17 

The Liberal Era, 1861-91 22 

PARLIAMENTARY REPUBLIC, 1891-1925 27 

Urbanization 28 

Arturo Alessandri's Reformist Presidency, 1920-25 . . 30 

MILITARY INTERVENTIONS, 1925-32 32 

The 1925 Constitution 32 

Carlos Ibanez's First Presidency, 1927-31 33 

MASS DEMOCRACY, 1932-73 34 

Alessandri's Second Presidency, 1932-38 34 

Popular Front Rule, 1938-41 36 

Juan Antonio Rios's Presidency, 1942-46 37 

Gabriel Gonzalez Videla's Presidency, 1946-52 39 

Ibanez's Second Presidency, 1952-58 41 

Jorge Alessandri's Rightist Term, 1958-64 44 

Eduardo Frei's Christian Democracy, 1964-70 45 

Salvador Allende's Leftist Regime, 1970-73 47 

MILITARY RULE, 1973-90 51 

Neoliberal Economics 53 

vii 



The 1980 Constitution 54 

The Crisis of 1982 and the Erosion of Military 

Rule 55 

Chapter 2. The Society and Its Environment 59 

J. Samuel Valenzuela 

GEOGRAPHY 63 

A Long, Narrow Nation 63 

Natural Regions 67 

THE PEOPLE 75 

Formation of the Chilean People 75 

Current Demographic Profile 80 

URBAN AREAS 82 

RURAL AREAS 88 

THE LABOR FORCE AND INCOME LEVELS 90 

SOCIAL ORGANIZATIONS AND ASSOCIATIONS 94 

WELFARE INSTITUTIONS AND SOCIAL PROGRAMS . . 98 

Social Security 100 

Health Programs 103 

Housing Policies 107 

EDUCATION 108 

Enrollments 108 

Administration and Reforms 112 

RELIGION AND CHURCHES 118 

Religious Affiliations and Church Organization 118 

Religion in Historical Perspective 120 

Forms of Popular Religiosity 125 

ATTITUDES TOWARD FAMILY AND GENDER 128 

Divorce, Abortion, and Contraception 128 

Family Structure and Attitudes Toward Gender 

Roles 131 

WHITHER CHILE? 133 

Chapter 3. The Economy 137 

Sebastian Edwards and Alexandra Cox Edwards 

EVOLUTION OF THE ECONOMY 141 

The Colonial Era to 1950 141 

Economic Policies, 1950-70 144 

The Popular Unity Government, 1970-73 145 

Economic Crisis and the Military Coup 146 

The Military Government's Free-Market 

Reforms, 1973-90 149 

The Return to Democracy, 1990 158 

THE CURRENT STRUCTURE OF THE ECONOMY 161 

Industry and Manufacturing 162 



Vlll 



Mining 163 

Agriculture 165 

Fishing and Forestry 166 

Energy 170 

Banking and Financial Services 173 

Transportation 174 

Telecommunications 178 

Tourism 180 

Construction 180 

INCOME, LABOR UNIONS, AND THE PENSION 

SYSTEM 182 

Employment and Unemployment 182 

Income Distribution and Social Programs 183 

Unions and Labor Conflicts 184 

Economic Results of the Pensions Privatization 187 

MACROECONOMIC POLICY, INFLATION, AND THE 

BALANCE OF PAYMENTS 188 

The Central Bank and Monetary Policy 188 

Exchange-Rate Policy and the Balance 

of Payments 190 

Trade Policy and Export Performance 191 

THE FUTURE OF THE ECONOMY 192 

Chapter 4. Government and Politics 197 

Arturo Valenzuela 

CONSTITUTIONAL HISTORY 200 

Development and Breakdown of Democracy, 

1830-1973 200 

Imposition of Authoritarian Rule 203 

The Constitution of 1980 205 

Authoritarianism Defeated by Its Own Rules 208 

The Constitutional Reforms of 1989 211 

THE STATE AND GOVERNMENT INSTITUTIONS 

IN CHILE 217 

The State and the System of Government 217 

The Presidency 220 

The Legislative Branch 225 

The Courts 231 

The Autonomous Powers 233 

Regional and Local Government 238 

PARTIES AND THE ELECTORAL SYSTEM 241 

The Party System 241 

The Electoral System 242 



ix 



The Parties of the Left 245 

The Parties of the Center 248 

The Parties of the Right 250 

THE 1993 PRESIDENTIAL ELECTION 252 

THE CHURCH, BUSINESS, LABOR, AND THE MEDIA . . 255 

The Church 255 

Business 257 

Labor 259 

The Media 261 

FOREIGN RELATIONS 263 

Relations with the United States 264 

Other Foreign Relations 267 

FUTURE CHALLENGES OF DEMOCRATIC 

CONSOLIDATION 271 

Chapter 5. National Security 275 

Adrian J. English and Scott D. Tollefson 

MILITARY TRADITION AND THE EVOLUTION OF 

THE ARMED FORCES 279 

Early History 279 

Genesis of the Armed Forces, 1814-36 280 

Peru-Bolivia Confederation War, 1836-39 282 

War of the Pacific, 1879-83 284 

Development of the Armed Forces 287 

Growth of United States Influence 290 

Repression and Human Rights Violations 291 

Civil-Military Relations 294 

MISSION AND ORGANIZATION OF THE ARMED 

FORCES 295 

Mission 295 

Command Structure 296 

Army 299 

Navy 302 

Air Force 305 

Civic Action 308 

Defense Spending 308 

MANPOWER AND TRAINING 310 

Recruitment and Conditions of Service 310 

Training 311 

Uniforms, Ranks, and Insignia 312 

FOREIGN SOURCES OF MATERIEL 316 

THE DEFENSE INDUSTRY 319 

Army Ordnance 320 

Naval Equipment 321 



x 



Aircraft Equipment 322 

Cardoen Industries 323 

Minor Defense Manufacturers 325 

THE SECURITY FORCES 326 

The Carabineros 326 

The Investigations Police 329 

Internal Security Intelligence Organizations 330 

PUBLIC ORDER AND INTERNAL SECURITY 331 

Incidence of Crime 331 

Narcotics Trafficking 333 

Criminal Justice 334 

The Penal System 335 

Terrorism 336 

NATIONAL SECURITY OUTLOOK 338 

Appendix. Tables 341 

Bibliography 381 

Glossary 419 

Index 431 

Contributors 459 

List of Figures 

1 Administrative Divisions (Regions) of Chile, 1993 xxxiv 

2 Three South American Viceroyalties, ca. 1800 12 

3 Territorial Adjustments among Bolivia, Chile, 

and Peru, 1874-1929 24 

4 Topography and Drainage 66 

5 Easter Island (Isla de Pascua), 1986 68 

6 Estimated Population by Age and Gender, 1991 82 

7 Employment by Sector, 1991 92 

8 Gross Domestic Product (GDP) by Sector, 1992 164 

9 Primary Petroleum, Natural Gas, and Minerals 

Activity, 1993 172 

10 Transportation System, 1993 176 

11 Government Structure, 1993 224 

12 Chile's Claims in Antarctica, 1993 270 

13 Organization of the Armed Forces and Security 

Forces, 1993 298 

14 Administrative and Operational Structure of the Army, 

1993 300 

15 Administrative and Operational Structure of the Navy, 

1993 304 



xi 



16 Administrative and Operational Structure of the Air 

Force, 1993 306 

17 Officer Ranks and Insignia, 1993 314 

18 Enlisted Ranks and Insignia, 1993 315 



Xll 



Preface 



Like its predecessor, this study is an attempt to examine objec- 
tively and concisely the dominant historical, social, environmen- 
tal, economic, governmental, political, and national security aspects 
of contemporary Chile. Sources of information included books, jour- 
nals, other periodicals and monographs, official reports of govern- 
ments and international organizations, and numerous interviews 
by the authors with Chilean government officials. Chapter bibliog- 
raphies appear at the end of the book; brief comments on sources 
recommended for further reading appear at the end of each chap- 
ter. To the extent possible, place-names follow the system adopted 
by the United States Board on Geographic Names. Measurements 
are given in the metric system; a conversion table is provided to 
assist readers unfamiliar with metric measurements (see table 1 , 
Appendix). A glossary is also included. 

Spanish surnames generally are composed of both the fatner's 
and the mother's family names, in that order, although there are 
numerous variations. In the instance of Eduardo Frei Ruiz-Tagle, 
for example, Frei is his patronymic and Ruiz-Tagle is his mother's 
maiden name. In informal use, the matronymic is often dropped, 
a practice that usually has been followed in this book, except in 
cases where the individual could easily be confused with a relative 
or someone with the same patronymic. For example, Frei Ruiz- 
Tagle, the current president, is the son of former president Ed- 
uardo Frei Montalva. 

The body of the text reflects information available as of March 
31, 1994. Certain other portions of the text, however, have been 
updated. The Introduction discusses significant events that have 
occurred since the completion of research, the Country Profile in- 
cludes updated information as available, and the Bibliography lists 
recently published sources thought to be particularly helpful to the 
reader. 



Xlll 



Table A. Chronology of Important Events 



Period 



Description 



SIXTEENTH CENTURY 
October 21, 1520 



1535-37 
1540 

February 12, 1541 

1553-58 

1557 

1560s 



Ferdinand Magellan first European to sight (but 
not identify) Chilean shores. 

Diego de Almagro leads first Spanish expedition 
to explore Chile. 

Pedro de Valdivia conquers Chile. 

Valdivia founds Santiago. 

Indigenous Araucanian uprising. 

Mapuche rebel chief Lautaro defeated. 

Alonso de Ercilla y Zuniga composes epic poem 
"La Araucana." 



SEVENTEENTH CENTURY 
1603 

1609 



1643 



1647 



EIGHTEENTH CENTURY 
1730 



1759-96 



1791 

NINETEENTH CENTURY 
September 18, 1810 

1814-17 

October 2, 1814 
February 12, 1817 



First army-like force, or militia, established in 
Chile. 

Pope Paul V authorizes war against Arau- 
canians. 

Although warfare against Araucanians con- 
tinues, Indians help Spaniards repel invasion 
of southern Chile by Brouwer expedition. 

Earthquake destroys Santiago. 



Earthquake causes great destruction in San- 
tiago and most of central Chile. 

Bourbon reforms give Chile greater indepen- 
dence from Viceroyalty of Peru. 

Governor Ambrosio O'Higgins y Ballenary out- 
laws encomiendas and forced labor. 



Criollo leaders of Santiago declare independence 
from Spain. 

The Reconquest (La Reconquista). 

Spanish troops from Peru reconquer Chile at 
Battle of Rancagua. 

Troops led by Bernardo O'Higgins Riquelme, 
father of Chile, and General Jose de San Mar- 
tin defeat Spanish in Battle of Chacabuco. 



XV 



Table A. — Continued 



Period 



Description 



1817 



O'Higgins (1817-23) becomes supreme director 
of Chile. 



April 5, 1818 



August 1811 



Chile wins formal independence after San 
Martin defeats last large Spanish force in 
Battle of Maipu. 

First provisional constitution approved in pleb- 
iscite. 



1818-30 
April 17, 1830 



Period of civil wars. 

Liberals defeated by Conservatives at Battle of 
Lircay. 



1830-61 
1830-37 



1833 
1836-39 



Period of Conservative rule. 

"Portalian State" initiated by businessman 
Diego Portales Palazuelos, who dominates 
politics. 

New Portalian constitution implemented. 

Chile wages war against Peru-Bolivia Con- 
federation. 



January 1839 

1861-91 
1879-83 



Chile wins war by defeating Peruvian fleet at 
Casma on January 12 and Bolivian Army at 
Yungay on January 20. 

Period of Liberal rule. 

Chile wages war against Bolivia and Peru in 
War of the Pacific. 



1883 
1891 



Chile seal 



s victorv w 



th Treatv of Ancon. 



Civil war pits supporters of President Jose 
Manuel Balmaceda Fernandez against Con- 
gress, which wins. 



TWENTIETH CENTURY 
1891-1925 

1925 

1945 



Period of Parliamentary Republic. 

Chile's second major constitution approved. 

Gabriela Mistral wins Nobel Prize for Litera- 
ture. 



September 4, 1970 



1971 



Popular Unity's Salvador Allende Gossens wins 
presidential election. 

Pablo Neruda wins Nobel Prize for Literature. 



XVI 



Table A. — Continued 



Period 



Description 



September 11, 1973 

September 1973-90 
1980 

1988 
1990 

March 11, 1994 



Military led by General Augusto Pinochet 
Ugarte overthrows Allende government. 

Period of military rule under General Pinochet. 

New military-designed constitution is approved 
in a plebiscite. 

Plebiscite held on Pinochet rule. 

Transition to democracy begins with pre- 
sidency of Patricio Aylwin Azocar. 

Aylwin is succeeded by Eduardo Frei Ruiz- 
Tagle. 



XVII 



Country Profile 




Country 

Official Name: Republic of Chile (Republica de Chile). 

Short Name: Chile. 

Term for Citizen(s): Chilean(s). 

Capital: Santiago. 



NOTE — The Country Profile contains updated information as available. 



XIX 



Geography 



Size: Totals 756,950 square kilometers (nearly twice the size of 
California); land area: 748,800 square kilometers, including Eas- 
ter Island (Isla de Pascua; 118 square kilometers), Islas Juan 
Fernandez (179 square kilometers), and Isla Sala y Gomez but ex- 
cluding claimed Chilean Antarctic Territory (Territorio Chileno 
Antartico), which covers 1,249,675 square kilometers (not recog- 
nized by the United States). 

Coastline: 6,435 kilometers (continental Chile). 

Maritime Claims: Contiguous zone: twenty-four nautical miles; 
continental shelf: 200 nautical miles; exclusive economic zone: 200 
nautical miles; territorial sea: twelve nautical miles. 

Disputes: Bolivia has sought a sovereign corridor to Pacific Ocean 
since ceding Antofagasta to Chile in 1883; Rio Lauca water rights 
in dispute between Bolivia and Chile; short section of southern 
boundary with Argentina indefinite; Lago del Desierto (Desert 
Lake) region under international arbitration as a result of a bor- 
der conflict between Argentina and Chile; Chile's territorial claim 
in Antarctica partially overlaps Argentina's claim. 

Topography and Climate: One of narrowest countries in world, 
averaging 177 kilometers wide (ninety kilometers wide at thinnest 
point in south and 380 kilometers across at widest point in north). 
Rugged Andes Mountains run down eastern side of country. Cor- 
dillera Domeyko (Domeyko mountain chain) in northern part of 
country runs along coast parallel to Andes. Five north-to-south 
natural regions: far north (Norte Grande), consisting of dry brown 
hills and sparse vegetation and containing extremely arid Ataca- 
ma Desert and Andean plateau; near north (Norte Chico), a semi- 
arid region between Rio Copiapo and Santiago; central Chile (Chile 
Central), most densely populated natural region, including three 
largest metropolitan areas — Santiago, Valparaiso, and Concep- 
cion — and fertile Central Valley (Valle Central), with temperate, 
Mediterranean climate; heavily forested south (Sur de Chile), south 
of Rio Bio-Bio, containing cool and very rainy (especially during 
winter) lake district and crisscrossed by hundreds of rivers; and 
far south (Chile Austral), sparsely populated, forested, constantly 
cold and stormy, with many fjords, inlets, twisting peninsulas, and 
islands. Land use: 7 percent arable (of which 29 percent irrigated), 
16 percent meadows and pasture, 21 percent forest and woodland, 
and 56 percent other, including 1 percent irrigated. Temperate rain 
forest totals 14,164,045 hectares. Annual rate of deforestation 
(1981-85): 0.7 percent. Nearly 607,030 hectares clear-cut (stripped 



xx 



of all trees) since 1978. Seasons: spring — September 21 to December 
20; summer — December 21 to March 20; autumn — March 21 to 
June 20; and winter — June 21 to September 20. 

Principal Rivers: Aconcagua, Baker, Bfo-Bfo, Imperial, Loa 
(Chile's longest at about 483 kilometers), Maipo, Maule, Palena, 
Token, and Valdivia. 

Principal Lakes: Del Toro, General Carrera, Llanquihue, Puye- 
hue, Ranco, Rupanco, Sarmiento, and Villarrica. 

Society 

Population: 13.7 million (July 1993 estimate), with 1.6 percent aver- 
age annual population growth rate between 1982 and 1992. Projected 
annual population growth rate 1.5 percent for 1991-2000. Density 
in 1993 eighteen persons per square kilometer, with great regional 
variations. Valparaiso Region, Bfo-Bfo Region, and Metropolitan 
Region of Santiago contained 63 percent of population, with about 
39 percent of total population, or 5.3 million people, in Metropoli- 
tan Region of Santiago (1992). Population about 86 percent urban, 
14 percent rural. Urban population annual growth rate in 1960-91 , 
2.6 percent; projected 1991-2000, 1.8 percent. Of some 335 com- 
munities nationally in 1993, poorest twenty-one located in regions 
of La Araucanfa (eleven), Bfo-Bfo (five), and Coquimbo (five), 
together containing 2.6 percent of national population. 

Ethnic Groups: Mestizo (mixed native American and European 
ancestry), 66 percent; European, 25 percent; native American, 7 
percent; and other, 2 percent. Under law of September 28, 1993, 
state recognizes Mapuche (also called Araucanian), Aymara, Rapa 
Nui, Quechua, Colla, Alacalufe, and Yagan as main indigenous 
communities. Native Americans totaled 1.3 million in 1992, in- 
cluding 928,069 Mapuche, 48,477 Aymara, and 21,848 Rapa Nui. 
Quechua and Aymara located in north; Alacalufe and Ona in south; 
Mapuche, who speak Mapudungu, in south and central Chile, 
mostly around Temuco; Pascuene and Huilliche on Easter Island. 
Only Mapuche and former Huilliche islanders managing to sur- 
vive culturally on mainland. 

Official Language: Spanish (called Castellano in Chile). 

Education and Literacy: As of 1966, primary education eight years 
and secondary education four years. School year runs from March 
through December. In mid-1980s primary school attendance varied 
between 93 percent and 96 percent; by 1989 secondary school 
enrollment had risen to 75 percent. Students in universities and 



xxi 



professional institutes numbered about 153,100 in 1989. Adult liter- 
acy rate 94.6 percent, with average of 7.5 years of schooling (1992). 

Health: Heavy investments in programs for very poor and in water 
and sanitation systems helped lower infant mortality rates and raise 
life expectancy, giving country a relatively high human develop- 
ment index (HDI) world ranking of thirty-sixth in 1992. Propor- 
tion of Chileans living in poverty decreased from 45 percent in 1985 
to 33 percent in 1992. Birthrate 22.4 per 1,000 population; fertility 
rate 2.4 children born per woman (1993); mortality rate 5.6 deaths 
per 1,000 population (1992). In 1993 life expectancy estimated at 
seventy-one years for males and seventy-seven years for females 
(total). Estimated 1993 infant mortality rate below 1991 rate of 14.6 
per 1,000 live births. Population with access to health services in 
1988-90, 95 percent; to safe water, 86 percent rural/urban aver- 
age, 100 percent urban; to sanitation, 83 percent. Twenty-eight 
recorded cholera cases in first nine months of 1993, with no deaths. 
In 1984-89 population per physician averaged 1,230. Social secu- 
rity benefits expenditures as a percentage of GDP: 9.9 percent 
(1980-89). 

Religion: In 1992 census, of population aged fourteen years and 
older (totaling 9,775,222), 76 percent declared themselves Roman 
Catholic, 13 percent Evangelical or Protestant, 7 percent indiffer- 
ent or atheist, and 4 percent other, including small Jewish, Muslim, 
and Christian Orthodox communities. Roman Catholic Church 
source of significant opposition to military regime of General Au- 
gusto Pinochet Ugarte (1973-90), playing key role in protection 
of human rights. Roman Catholic Church's influence in society 
has diminished since 1970s because of substantial growth of Pen- 
tecostal (Evangelical) churches. 

Economy 

Salient Features of the Economy: International trade liberalized 
since 1979. Has had fundamentally sound market economy. Since 
1990 democratically elected government has maintained export- 
led growth, fiscal discipline, and relatively low inflation. Exchange- 
rate policy, based on daily adjustments of nominal exchange rate 
and aimed at encouraging exports, has been at center of country's 
economic success. Gross domestic public investment in 1991: 2.9 per- 
cent of GDP; gross domestic private investment in 1991: 15.9 per- 
cent of GDP. Gross national savings in 1992: 18.4 percent of GDP. 
Average annual rate of inflation 20 percent in 1980-90 period. In- 
flation 18.7 percent in 1991, 12.7 percent in 1992, and 12.2 percent 
in 1993; projected to be 10.0 percent in 1994 and 9.0 percent 



xxn 



in 1995. Unemployment in 1992 about 4.5 percent, according 
to National Statistics Institute. Estimated 1994 budget US$11.4 
billion. 

Gross Domestic Product (GDP): One of Latin America's most 
economically developed countries, with a diversified, free-market 
economy. In 1992 GDP US$33.7 billion. In 1992 GDP per capita 
between US$2,515 and US$2,800, rising to US$3,160 in 1993. 
During 1990-93 period, poorest 20 percent of population ex- 
perienced increase in income of 30 percent. GDP growth rate in 
1992: 10.4 percent. Slowed to 6 percent in 1993. GDP growth 
projected by Central Bank to be 4.5 percent in 1994, and by 
Economist Intelligence Unit (EIU) to be 8 percent in 1995. 

Gross National Product (GNP): In 1990 GNP about US$25.5 
billion; 2.8 percent annual growth rate in 1980-90 period. In 1992 
GNP per capita US$2,550; 1.1 percent annual per capita growth 
rate in 1980-90 period. 

Agriculture: Agriculture, forestry, and fishing accounted for 8.2 
percent of GDP in 1992, according to EIU, or 6.2 percent accord- 
ing to Inter-American Development Bank (IDB). Exports totaled 
US$1.2 billion (1991). Major crops: apples, corn, grapes, plums, 
potatoes, rice, sugar beets, and wheat, as well as forest products. 
Leading agricultural export: fruit. Leading agricultural imports: 
bananas, coffee, corn, cotton, dry milk, rice, soybean, sugar, tea, 
and wheat. Although free-market oriented, agricultural sector pro- 
tected by "price bands." Agriculture accounted for 18 percent of 
labor force (1989-91). 

Industry: One of most highly industrialized countries in Latin 
America. Manufacturing accounted for 20.8 percent of GDP (1992), 
according to EIU, or 35.9 percent, according to IDB. Industrial 
exports totaled US$4 billion (1992), surpassing copper exports 
(US$3.9 billion) for first time, but slowed in 1993. Industry ac- 
counted for 20.8 percent of labor force (1992). Mining accounted 
for 6.7 percent of GDP (1992), with copper still most important 
product in 1993, despite plunging prices (accounting for 30 per- 
cent of total value of exports in 1991). World's leading copper 
producer since 1982. Estimated 2 million tons of copper produced 
in 1993, up from 1 .9 million tons in 1992. Opening of new copper 
mines and increasing output at existing mines expected to boost 
country's share of world copper production from 17.5 percent in 
1990 to about 33 percent in 2000, or 3.3 million tons by 2000. Chile 
produces about twenty-four nonmetallic minerals, with exports 
amounting to US$191 million (1993). 



xxm 



Energy: National energy reliance on petroleum and natural gas, 
60 percent; hydroelectric power, 25 percent; and coal, 15 percent. 
In 1992 kilowatt capacity 5,769,000; kilowatt-hours produced, 
22,010 million. Annual rate of change in commercial energy con- 
sumption (1980-90), 2.9 percent. However, electricity demand rose 
by 8 percent in 1993, and growth of more than 6 percent was ex- 
pected for 1994. Domestic oil consumption estimated at 138,527 
barrels per day (1991). Oil reserves declining at 10 percent per year; 
stood at 300 million barrels in 1992. Estimated 17.9 billion bar- 
rels per day produced in 1991, equivalent to only 13 percent of 
domestic oil consumption. In 1992 Argentina and Chile agreed to 
build a trans- Andean oil pipeline. Gas production amounted to 
about 4 billion cubic meters in 1991 . Work began on gas pipeline 
from Argentina in 1992. 

Services: Accounted for 29.1 percent of GDP (1992), according 
to EIU, or 57.9 percent, according to IDB. Employed 26.4 per- 
cent of labor force (1991). Tourism one of key service industries. 
Total visitors — half of them from Argentina — grew from 1 .35 mil- 
lion in 1991 to estimated 1.5 million in 1992; visitors spent esti- 
mated US$900 million in 1992 and 1993. 

Balance of Payments: Continued trade surpluses since 1982 led 
to accumulation of unprecedented US$9.9 billion in international 
reserves by end of 1993. Country's foreign investment inflow in 
first eleven months of 1993 rose to US$2.3 billion, a 92 percent 
increase over same period of 1992. Current account deficit in 1993 
estimated at about 4.5 percent of GDP, or US$1 .9 billion. Expected 
to broaden to US$2.4 billion, or 5.3 percent of GDP, in 1994. 
However, capital account surplus in 1993 created US$800 mil- 
lion overall balance of payments surplus (US$50 million more 
than in 1992). Balance of payments surplus in 1994 estimated 
at only US$100 million, with current account deficit of US$2.4 
billion. 

Imports: Principally petroleum, wheat, capital goods, spare parts, 
motor vehicles, and raw materials, mainly from European Union 
(EU), United States, Japan, and Brazil. Imports expenditures in 
1993 estimated at US$10.1 billion, with 20 percent growth of im- 
ports of capital goods. Liberal import policy. Import duty a flat 
11 percent for most products, except for expensive luxury goods 
or commodities governed by price band, which often carry addi- 
tional surtaxes; regional accords aiming to cut tariffs to zero. Im- 
ports also subjected to 18 percent value-added tax (VAT) on c.i.f. 
(cost, insurance, and freight) value. Duty-free imports of materials 



xxiv 



used in products for export within 180 days, with prior authoriza- 
tion. Free-zone imports, if reexported, exempt from duties and 
VAT. Central Bank approval needed for all imports. 

Exports: Principally copper (accounting for about 35 percent of 
exports), industrial products, molybdenum, iron ore, wood pulp, 
seafood, fruits, and nuts, mainly to EU, United States, Japan, and 
Brazil. Constituted 34 percent of GDP in 1990; 7 percent annual 
growth rate 1980-90. International recession and lower commodity 
prices caused value of exports to fall 7 percent in 1993, but ex- 
ports constituted about 36 percent of GNP that year. Estimated 
1993 total export earnings of US$9.3 billion down by US$800 mil- 
lion, creating country's first trade deficit in more than a decade. 
In 1991-93 Japan was Chile's largest export market, surpassing 
Chile's exports to United States. In 1993 Chile was third-largest 
supplier of wine to United States, after Italy and France. 

Foreign Debt: Despite substantial improvement in country's ex- 
ports, foreign debt rose from US$17.4 billion in 1991 to US$18.9 
billion in 1992 (or US$19. 1 billion according to International Mone- 
tary Fund) to an estimated US$20.2 billion in 1993. However, net 
foreign debt (total debt minus net international reserves) declined 
from 47 percent of GDP in 1989 to 21 percent of GDP in 1993. 
By early 1991, Chile was upgraded to status of nonrestructuring 
country, meaning that its debt was now considered recoverable, 
thus facilitating access to voluntary capital markets. In June 1991, 
Chile became first Latin American country to benefit from reduc- 
tion in debt with United States within framework of President 
George Bush's Initiative for the Americas agreement. In Decem- 
ber 1993, Standard and Poor Corporation, a United States credit 
rating agency, raised Chile's credit rating from investment-grade 
(BBB) to BBB + for long-term debt in foreign currency. 

Fiscal Year (FY): Calendar year. 

Exchange Rate: On September 13, 1994, Ch$405.9 = US$1 . 

Transportation and Telecommunications 

Roads: Totaled 79,025 kilometers, including 9,913 kilometers of 
paved roads, 33,140 kilometers of gravel roads, and 35,972 kilo- 
meters of improved and unimproved earth roads. Pan American 
Highway (Longitudinal Highway), running length of country, 
forms 3,600-kilometer backbone of road system, with transversal 
roads leading from it east and west. Southern extension of about 



xxv 



1,100 kilometers, Southern Highway, from Puerto Montt to Puerto 
Yungay, opened in 1988. International highways also include Arica- 
Santos Highway to Bolivia and Trans-Andean Highway between 
Valparaiso and Mendoza, Argentina. 

Motor Vehicles: 1.7 million (1994), including 1,034,370 automo- 
biles, 403,842 vans, 49,006 buses, 126,698 trucks, 80,558 motor- 
cycles, and 46,014 other commercial vehicles. An additional 202,000 
motor vehicles expected to be registered in 1994. 

Railroads: Mostly state owned, operated by State Railroad Com- 
pany (Empresa de Ferrocarrilles del Estado — EFE). Totaled 7,766 
kilometers. Privately owned lines, totaling 2,130 kilometers, mostly 
in desert north, where northern terminal is Iquique. No passenger 
trains to northern Chile from Santiago. Four international rail- 
roads: two to Bolivia, one to northwest Argentina, and one to Peru. 
In 1992 Congress approved privatization of EFE, with only infra- 
structure remaining state owned. After period of neglect, govern- 
ment investment in EFE infrastructure was expected in 1993 to 
total US$98 million. In July 1993, Chile and Brazil invited Bolivia 
and Argentina to participate in joint effort to build interoceanic 
railroad line between Chilean and Brazilian coasts. Santiago has 
underground railroad system (metro). 

Ports: Nine main ports: Antofagasta, Arica, Coquimbo, Iquique, 
Puerto Montt, Punta Arenas, San Antonio, Talcahuano (country's 
best harbor and its main naval station), and Valparaiso; also nine 
others. Only four or five have adequate facilities; about ten are 
used primarily for coastal shipping, restricted to Chilean flag ves- 
sels. Northern mining ports include Caldera, Chariaral, Coquim- 
bo, and Huasco. Petroleum and gas ports include Cabo Negro, 
Clarencia, Puerto Percy, and San Gregorio. Main forest product 
ports San Vicente and Lirquen on Concepcion Bay. Transnation- 
al transport of goods by road between Chilean ports of Antofagas- 
ta, Arica, Iquique, and Valparaiso and Brazilian ports of Santos 
and Porto Alegre. Government building US$10 million commer- 
cial port in Punta Arenas to service growing number of foreign 
vessels, cruise liners, and scientific ships en route to Antarctica. 
Puerto Ventanas — first private port in country, located on Quin- 
teros Bay, in Valparaiso Region — opened in 1993. 

Waterways: 725 kilometers of navigable inland waterways, mainly 
in southern lake district; Rio Calle Calle provides waterway to 
Valdivia. 

Airports and Air Transport: 390 total, of which 351 are usable 
airports, forty-eight of them paved. Two international airports: 
Comodoro Arturo Merino Benftez International Airport at Pudahuel 



xxvi 



outside Santiago; Chacalluta International Airport, Arica. Three 
main Chilean carriers: National Airlines (Linea Aerea Nacional 
de Chile — LAN-Chile), Fast Air, and Chilean Airlines (Lfnea Aerea 
del Cobre — Ladeco). By 1993 air transportation market had grown 
by 56 percent since 1990. United States share of United States- 
Chile market increased from 34 percent in 1990 to 62 percent in 
late 1993. 

Telecommunications: 342 radios, 205 televisions, and sixty-eight 
telephones per 1,000 people in 1990. Broadcast stations included 
167 AM, no FM, 131 TV, and twelve shortwave stations. Modern 
telephone system based on extensive microwave relay facilities. To- 
tal telephones in 1991 about 768,000. In October 1993, Chilesat, 
a Telex Chile subsidiary, joined the Americas- 1, Columbus-2, and 
Unisur cable networks, a fiber-optics telecommunications system 
through submarine cables linking South America with North Ameri- 
ca and Europe. 

Government and Politics 

Government: Multiparty republic with presidential system based 
on 1980 constitution, amended and approved by referendum in 
July 1989, with fifty-four reforms. Executive, legislative, and ju- 
dicial branches. Executive power with president directly elected; 
successive reelection not allowed. Presidential candidates must win 
majority or face runoff. Under constitutional reform approved by 
Congress in February 1994, presidential term reduced from eight 
to six years, the traditional term. Eduardo Frei Ruiz-Tagle, elect- 
ed president of Christian Democratic Party (Partido Democrata 
Cristiano — PDC) on November 23, 1991, won presidential elec- 
tion held on December 11, 1993, and assumed presidency on March 
11, 1994. National Security Council (Consejo de Seguridad Na- 
cional — Cosena) includes president of republic, presidents of 
Supreme Court and Senate, and heads of armed forces and police. 
Bicameral National Congress (hereafter, Congress; located in Val- 
paraiso): Senate, with forty-six members, including eight desig- 
nated senators, serving eight-year terms; and Chamber of Deputies 
with 120 members serving four-year terms. Courts include Supreme 
Court (seventeen judges), sixteen appellate courts, and a number 
of military courts. 

Administrative Subdivisions: Twelve regions (regiones), and 
Metropolitan Region of Santiago. Regions each headed by an in- 
tendant (intendente). Regions subdivided into total of fifty-one 



xxvn 



provinces (provincias), each headed by a governor (gobernador) and 
300 municipalities (municipalidades) , each headed by a mayor (al- 
calde) appointed by municipal council (in towns with fewer than 
10,000 inhabitants) or by president of the republic (in towns with 
more than 10,000 inhabitants). Lowest subdivision, communes 
(comunas). Santiago, like other cities, headed by mayor. 

Politics: Governing coalition, Coalition of Parties for Democracy 
(Concertacion de Partidos por la Democracia — CPD), dominated 
by PDC and socialists, expected to retain control in Congress, but 
without increase in legislative strength it may be unable to introduce 
important constitutional reform, such as composition of Constitu- 
tional Tribunal, membership and functions of Cosena, and pro- 
motion of military officers. 

Political Parties: Left — Communist Party of Chile (Partido 
Comunista de Chile — PCCh) discredited since October 1988 pleb- 
iscite (which PCCh claimed regime would not allow Pinochet to 
lose), revolution in Eastern Europe, and disintegration of Soviet 
Union. Party for Democracy (Partido por la Democracia — PPD), 
which is an independent-minded creation of the Socialist Party (Par- 
tido Socialista) and a member of Aylwin government's CPD coa- 
lition, became second most popular party in 1993, after PDC. 
United Popular Action Movement (Movimiento de Accion Popu- 
lar Unitario — MAPU), a Mapuche leftist party, quit CPD in June 
1993. Christian Left (Izquierda Cristiana), a minor leftist party 
and CPD member. Humanist-Green Alliance (Alianza Humanista- 
Verde— AHV) also left CPD in 1993. Center— PDC had most fol- 
lowers in 1993, with 36.2 percent of overall votes. Radical Party 
(Partido Radical) supporting Frei Ruiz-Tagle in 1993. Right — 
National Renewal (Renovacion Nacional). Independent Democratic 
Union (Union Democrata Independiente — UDI), political voice 
of former military regime's economic and political elite. Although 
National Renewal dominant rightist party, it and UDI main rivals 
for leadership of right. Union of the Centrist Center (Union de 
Centro Centro— UCC) also a rightist party. On July 3, 1993, 
center-right parties — National Renewal, UDI, UCC, National 
Party (Partido Nacional), and Liberal Party (Partido Liberal) — 
agreed to form coalition called Union for the Progress of Chile 
(Union por el Progreso de Chile). However, center-right remained 
in disarray prior to December 1993 elections. 

Foreign Relations: Pro-West, pro-democracy. Maintains relations 
with more than seventy countries. Since restoration of democratic 
government in 1990, has reestablished political and economic ties 



xxvm 



with other Latin American countries, North America, Europe, and 
Asia. United States-Chilean relations have improved considera- 
bly since return to democracy and progress on issue of 1976 assas- 
sination in Washington of former Chilean ambassador to United 
States Orlando Letelier and United States citizen Ronnie Moffitt. 
Although shunning multilateral regional integration schemes, en- 
tered into bilateral tariff-cutting accords with individual Latin 
American countries — including Argentina, Bolivia, Colombia, and 
Mexico — in early 1990s, as well as negotiated framework trade 
agreement with United States in October 1990. Since joining Rio 
Group in 1990, has played active role in promoting democracy 
within inter- American system. 

International Agreements and Membership: Member of Agen- 
cy for the Prohibition of Nuclear Weapons in Latin America and 
the Caribbean; Economic Commission for Latin America and the 
Caribbean; General Agreement on Tariffs and Trade; Group of 
Eleven; Group of Seventy- Seven; Inter- American Development 
Bank; International Atomic Energy Commission; International 
Bank for Reconstruction and Development; International Civil Avi- 
ation Organization; International Criminal Police Organization; 
International Labor Organization; International Maritime Satel- 
lite Organization; International Monetary Fund; International 
Office for Migration; International Telecommunications Satellite 
Organization; International Telecommunications Union; Latin 
American Integration Association; League of Red Cross and Red 
Crescent Societies; Organization of American States; Organiza- 
tion of Copper Exporting Countries; Rio Group; United Nations 
and its main affiliated organizations; World Federation of Trade 
Unions; World Health Organization; World Intellectual Property 
Organization; and World Tourism Organization. 

National Security 

Armed Forces: Despite seventeen years of military rule (1973-90), 
still exceptionally professional and generally free of factionalism 
or partisan politics. In 1993 combined strength at least 91,800 (in- 
cluding 54,000 army, 25,000 navy, and 12,800 air force). Army 
reserves additional 50,000. 

Defense Budget: Defense budget averaged US$1 billion annually 
in 1990-93. Annual average imports of major conventional arms 
US$212 million in 1987-91; as a percentage of national imports 
in 1990, 3.0 percent. 



XXIX 



Military Units: Army organized into seven military areas (areas 
militares — AMs) — headquartered in Antofagasta, Santiago, Con- 
cepcion, Valdivia, Punta Arenas, Iquique, and Coihaique — and 
seven divisions, one for each AM. Navy organized into four naval 
zones, headquartered in Iquique, Punta Arenas, Talcahuano, and 
Valparaiso. Operational command includes Fleet, Submarine Com- 
mand, and Transport Force. Navy includes Navy Infantry Corps 
(3,000 marines), Naval Aviation (750 members), and Coast Guard 
(1,500 members). Air force organized into three commands — 
Combat Command, Personnel Command, and Logistical Com- 
mand — four air brigades, and twelve groups or squadrons. Air 
brigades headquartered in Iquique, Santiago, Puerto Montt, and 
Punta Arenas. Also operated an air base on King George Island, 
in Chilean Antarctic Territory. 

Military Equipment: Ground forces equipped with forty-seven 
AMX-13 light tanks and twenty-one AMX-30 medium battle tanks 
from France; fifty M-41, sixty M-24, and 150 M4A3/M51 Super- 
Sherman tanks from United States/Israel; and 500 armored per- 
sonnel carriers (APCs) from Brazil and 60-100 from United States. 
Navy ships include six missile destroyers, four missile frigates, and 
four submarines. Marines equipped with forty French APCs. Air 
force equipment includes sixteen F-5 fighters from United States, 
fifteen Dassault Mirage fighters from France, and thirty-three 
Hawker Hunters from Britain, as well as twenty Chilean-made strike 
aircraft and sixty-eight trainers (made partially or wholly by Chile). 

Police: Official name: Forces of Order and Public Security. Con- 
sist of two separate law enforcement forces: Carabineros (national, 
31,000-member paramilitary police force) and Investigations Police 
(national, 4,000-member plainclothes organization). Carabineros or- 
ganized into three main zones — Northern Zone, Central Zone, and 
Southern Zone — with marine and air sections. Investigations Police 
operate in support of Carabineros and intelligence services of armed 
forces. For example, Investigations Police operate an antinarcotics 
force. In addition to law enforcement and traffic management, 
Carabineros engage in narcotics suppression, border control, and 
counterterrorism. Italy and Spain pledged to help Aylwin govern- 
ment finance and train civilian-based security force capable of com- 
bating terrorist threat. 

Insurgents: Various terrorist groups still sporadically active in 1993: 
pro-Cuban Movement of the Revolutionary Left (Movimiento de la 
Izquierda Revolucionaria), United Popular Action Movement- Lau- 
taro (Movimiento de Accion Popular Unitario-Lautaro), Lautaro 



XXX 



Youth Movement (Movimiento de Juventud Lautaro), Manuel 
Rodriguez Patriotic Front (Frente Patriotica Manuel Rodriguez), 
and Maoist-oriented Manuel Rodriguez Patriotic Front-Autono- 
mous (Frente Patriotica Manuel Rodriguez- Autonomo). None a 
serious threat to national security, but each capable of occasional 
acts of terrorism. 



xxxi 



Introduction 



THE SOUTHERNMOST NATION of Latin America and one 
of the longest and narrowest nations in the world, Chile may de- 
rive its name from the indigenous Mapuche word "Chilli," which 
may mean "where the land ends." The Spanish conquistadors had 
heard about Chilli from the Incas of Peru, who had tried but had 
failed to conquer the land. In any case, the few survivors of Diego 
de Almagro's first Spanish expedition south from Peru in 1535-37 
called themselves the "men of Chilli." 

Despite its geographical isolation by formidable barriers — the 
Andes Mountains on its eastern flank, the Atacama Desert in its 
northernmost area, and the Pacific Ocean on its western side — 
Chile traditionally has been one of South America's best educated 
and most stable and politically sophisticated nations. Chile enjoyed 
constitutional and democratic government for most of its history 
as a republic, dating from 1818, particularly after adoption of its 
1833 constitution. After a period of quasi-dictatorial rule in the 
1920s and early 1930s, Chile developed a reputation for stable 
democratic government. Chileans have also benefited from state- 
run universities, welfare institutions, and, beginning in 1952, a 
national health system. 

Throughout the 1970-90 period, Chilean national identity was 
tested as the country was subjected to profound political, economic, 
and social changes. Although the country began the 1970s by em- 
barking on what soon proved to be a disastrous experiment in so- 
cialism, it ended the 1980s with a widely acclaimed free-market 
economy and a military government that had committed itself, al- 
beit inadvertently through a plebiscite, to allowing a transition to 
democracy in 1990. Since the restoration of democracy, Chile has 
served as a model for other developing nations and the East Euro- 
pean countries that are attempting to make a similar transition to 
democratic government and an antistatist, free-market economy. 
Yet the Chileans endured rough times before finding an economic 
prescription that worked for them. 

During the ill-fated Popular Unity (Unidad Popular) govern- 
ment of its Marxist president, Salvador Allende Gossens (1970-73), 
Chile experienced uncharacteristic economic and political turbu- 
lence. As economic and political conditions deteriorated rapidly 
in August 1973, the Chilean Armed Forces and even the moder- 
ate Christian Democratic Party (Partido Democrata Cristiano — 
PDC), Chile's largest single party, began to view the Allende 



xxxv 



Boundary representation 
not necessarily authoritative 




'Pacific 



Ocean 



Iquiquel 



Antolagastal 



Is la 
San 
Felix 

(Chile) 



Is la 
San 

Ambrosio 

(Chile) 



( 66 




Key to Regions 




, 


Region de Tarapaca 


$^ BOLIVIA 


II 
III 


Region de Antofagasta 
Region de Atacama 


y "l 


IV 


Region de Coquimbo 




V 


Region de Valparaiso 


) '? 


- 


Region Metropolitana 
de Santiago 




VI 


Region del Libertador 
General Bernardo O'Higgins 


1 


VII 


Region del Maule 


VIII 


Region del Bio-Bio 


IX 


Region de La Araucam'a 


1 


X 


Region de Los Lagos 




XI 


Region Aisen del General 






Carlos Ibanez del Campo 


1 -A 

v ■ 


XII 


Region de Magallanes y 
La Antartica Chilena 



Copiapd 



^V 1 



a nd« 



La Serena) \ \ 



Valparaiso^. ^.Santiago 
Rancagua 
Vli / Talca 



ARGENTINA 



' Ma Sala 

28 - w y Gomez 



I 

109* ,~v, 
30' W J 



\ 10' W 

^MataverT 2 7° 

10' S~ 

o * Easter Island 

i Miles (Isla de Pascua) 



— International boundary 

— Region boundary 
B National capital 

Region capital 
► Populated place 
< Region 

100 200 300 400 Kilometers 

"•-H — V- — H 1 

100 200 300 400 Miles 




Figure 1. Administrative Divisions (Regions) of Chile, 1993 



government's socialist economic policies as a threat. On Septem- 
ber 11, 1973, the armed forces shocked the world by attacking the 
lightly defended presidential palace, La Moneda, with army troops 
and aerial bombardment. Led by newly appointed army com- 
mander General Au gusto Pinochet Ugarte, the bloody coup seemed 
incongruously violent for a country of Chile's democratic and civil 
traditions, especially considering that Allende had been elected 
democratically and had won a substantial 43 percent of the vote 
in the March 1973 congressional elections. Not having fought a 
real war since the War of the Pacific (1879-83) against Peru and 
Bolivia, the army seemed to welcome a pretext for reminding 
Allende 's supporters of the military option contained in their own 
national motto, "By reason or by force." 

In the "Historical Setting" chapter, historian Paul W. Drake 
summarizes various explanations for Allende 's downfall and the 
coup as posited by analysts of the different political tendencies. 
Drake takes a similarly egalitarian approach to assessing blame, 
noting that "there was ample blame to go around" and that 
"groups at all points on the political spectrum helped destroy the 
democratic order by being too ideological and too intransigent." 
Prior to the coup, Chilean society had become polarized between 
Allende 's supporters and the growing opposition, particularly dur- 
ing the culmination of the constitutional crisis in August 1973. In 
political terms, society was divided into three hostile camps — the 
Marxist left, the Christian Democratic center, and the conserva- 
tive right. In "The Economy" chapter, economists Sebastian Ed- 
wards and Alejandra Cox Edwards blame the downfall of the 
Allende government to a large extent on its disregard of "many 
of the key principles of traditional economic theory. " In their anal- 
ysis, Allende' s Popular Unity government was at fault, not only 
because of its monetary policies but also because of its lack of at- 
tention to the role that the real exchange rate plays in a country's 
international competition and balance of payments. 

The Allende episode has remained politically charged during the 
past two decades, as evidenced by the march by Socialists and Com- 
munists on La Moneda and their skirmishes with police on the 
occasion of the twentieth anniversary of Allende 's overthrow. A 
peculiar aspect of the historiography of the military coup, one 
that is illustrative of the political sensitivities surrounding it, is how 
Allende 's death has been described. Some scholars have mentioned 
both versions of his death — the official military account that he com- 
mitted suicide and the left-wing version that he was assassinated 
by the military. Others, including historian Mark Falcoff, have 
used the more noncommittal phrase that Allende "died in the 



xxxvi 



coup." Thanks in large part to the assassination myth that Cuban 
president Fidel Castro Ruz and Colombian novelist Gabriel Garcia 
Marquez helped to create, the left-wing version is still widely be- 
lieved. Available evidence, however, is adequate to reasonably con- 
clude that Allende committed suicide with the AK-47 assault rifle 
given him by Castro. Scholars such as Paul E. Sigmund and James 
Dunkerley believe Allende 's death was a suicide, and reference 
sources and mainstream news media tend to use this version. 

It is fairly well known that Allende was a long-time admirer of 
Chilean president Jose Manuel Balmaceda Fernandez (1886-91), 
who shot himself to death while inside the Argentine legation on 
September 19, 1891 , the day after his term ended. Balmaceda com- 
mitted suicide as a result of his defeat in the Civil War of 1891 
between his supporters and those of the National Congress (here- 
after, Congress). In the weeks before the 1973 military coup, Al- 
lende, who like Balmaceda had overstepped his constitutional 
authority, had made his obsession with suicide as a last resort known 
to various individuals, including French president Francois Mit- 
terrand. The coup and Allende 's death were a tragic denouement 
to a chapter in Chilean history that most Chileans probably would 
like to forget, just as they would like to forget the repression that 
followed. 

After the overthrow of the Allende government, Chile was 
plunged into a long period of repressive military rule. According 
to the National Commission on Truth and Reconciliation (the Ret- 
tig Commission), an eight-member investigatory body created by 
the government of Patricio Aylwin Azocar (1990-94), the armed 
forces and security forces were responsible for the deaths of 2,115 
Chileans in the years following the 1973 coup, as well as the sys- 
tematic torture or imprisonment of thousands of other opponents 
of the Pinochet regime. 

Beginning with the Allende government and continuing with the 
military regime of General Pinochet (1973-90), Chile underwent 
two decades of social, economic, and political restructuring. As po- 
litical scientist Arturo Valenzuela points out in the "Government 
and Politics" chapter, the Pinochet regime, ironically, proved to 
be "the longest and most revolutionary government in the nation's 
history." Although the Pinochet regime adopted a system of local 
government administration based on corporatism (see Glossary), 
it avoided the corporatist economic policies often associated with 
authoritarian military rulers and favored by Chile's industrial bour- 
geoisie and landowning class. Instead, Pinochet was guided by the 
so-called "Chicago boys" (see Glossary), economists trained at the 
University of Chicago by Milton Friedman, a spokesman for 



xxxvn 



monetarism (see Glossary). Determined to transform Chile's statist 
economy, Pinochet embraced the free-market, export-oriented eco- 
nomic model recommended by these advisers. The policies called 
for integrating the Chilean economy into the world economy, 
privatizing nationalized industries as well as the social security and 
health sectors, sharply reducing the number of public employees, 
adopting monetarist policies, deregulating the labor market, and 
carrying out a sweeping tax reform, among other measures. 

By the late 1980s, the Chilean economy was again booming, and 
other developing countries were looking to it as an economic model. 
The regime's drive to privatize was an important indicator of the 
transition to a market economy. Of about 550 firms under state 
control in the 1970s, fewer than fifty remained so by the end of 
1991 . Whether Chile's structural transformations could have been 
carried out by a democratic government is unclear. By the early 
1990s, Argentina's democratically elected president, Carlos Saul 
Menem, had achieved comparable reforms without sacrificing 
democracy or human rights. However, the success of the Pinochet 
model in Chile probably had less to do with authoritarianism per 
se than it did with the authoritarian implementation of antistatist, 
free-market policies. 

Fortunately for the future of Chilean democracy, Pinochet was 
unable to carry out his plan to permanently abolish traditional po- 
litical parties and institutions and continue ruling as Chile's presi- 
dent for most of the 1990s. His mistake (and Chile's gain) was to 
hold a plebiscite on a key provision of the Pinochet constitution, 
which voters had approved on September 11, 1980. The 1980 con- 
stitution provided for the gradual restoration of democracy by 1989, 
but it would have extended Pinochet's presidency through most 
of the 1990s. An overconfident Pinochet proceeded with the con- 
stitutionally mandated plebiscite on October 5, 1988, and was 
shocked when nearly 55 percent of registered voters indicated their 
preference for open elections in late 1989, while only 43 percent 
voted for allowing Pinochet to remain president through 1997. Ac- 
cording to Arturo Valenzuela in the "Government and Politics" 
chapter, the opposition basically outfoxed Pinochet and won the 
plebiscite "following Pinochet's rules." 

Aylwin, a Christian Democrat, easily won the long-awaited 
presidential election on December 14, 1989, as the candidate of 
the Coalition of Parties for Democracy (Concertacion de Partidos 
por la Democracia — CPD), winning 55.2 percent of the vote. In 
concurrent congressional elections, the CPD also won a majority 
of elected seats in both houses of Congress. However, the coali- 
tion was unable to offset the nine Pinochet-designated senators, 



xxxvm 



making the CPD's plans for further reform of the military-designed 
constitution unattainable for the foreseeable future. 

When Aylwin (1990-94) took office as president on March 11, 
1990, he inherited one of the strongest economies in Latin America, 
although the gross domestic product (GDP — see Glossary) growth 
rate in 1990 was only 2.1 percent. In addition to continuing 
Pinochet's free-market policies, Aylwin enhanced the former re- 
gime's foreign trade policy by further reducing import tariffs from 
15 percent to 11 percent. Whereas the free-market policies adopt- 
ed by Uruguay in 1990 met with strong resistance from a popula- 
tion accustomed to a generous cradle-to-grave welfare system, in 
Chile similar policies met with support from all sectors of society. 
Chile emerged not only as a showcase of a successful transition to 
moderate democratic government but also as a widely admired eco- 
nomic model for the developing world, achieving a GDP growth 
rate of 5.5 percent in 1991, with an unemployment rate of only 
6.5 percent, and an unprecedented 9 percent GDP growth rate in 
1992. The GDP growth rate reportedly slowed to about 5.5 per- 
cent in 1993, but the economy remained strong. In 1993 unem- 
ployment was only 5 percent, and inflation was down to 12 percent. 
Moreover, thanks to the economic policy of President Aylwin' s 
minister of finance, Alejandro Foxley Riesco, total investment in 
Chile in 1993 was an impressive 27 percent of GDP, while Chile 
invested a comparable percentage of its GDP in other countries, 
including Argentina. 

Chile's economic reforms had their downside. As Samuel Valen- 
zuela points out, the Pinochet regime's social and economic poli- 
cies led to increased socioeconomic inequalities, and urban and rural 
poverty remained extensive. The severe structural transformations, 
combined with the two harsh recessions and high debt-service ob- 
ligations, aggravated the already high inequality of income distri- 
bution. According to Chilean sociologists Cristobal Kay and Patricio 
Silva, who was health undersecretary in the early 1990s, extreme 
poverty (see Glossary) still affected nearly 55 percent of the rural 
population in 1990. The standard of living of many Chileans was 
further reduced by the declining quality of schooling and health 
care and inadequate land reform. Although the regime made heavy 
investments in programs for the very poor, thus helping to lower 
the infant mortality rate and raise life expectancy, its land reform 
measures were not particularly effective. Chile in 1987 remained 
in the category of countries with high inequality in the distribu- 
tion of landholdings, with a Gini coefficient (see Glossary) of 0.64, 
according to the United Nations Development Programme. 



xxxix 



The Aylwin government funneled at least 20 percent more 
resources into social programs, such as education, housing, and 
health, by raising taxes and seeking foreign assistance. Under the 
Aylwin government, the income of the lowest quintile of the popu- 
lation increased by 30 percent in 1990-93. By 1992 the proportion 
of Chileans living in poverty had decreased to 33 percent, from 
45 percent in 1985. This amounted to 4.2 million Chileans living 
in poverty in 1993, with 1.2 million living in extreme poverty. 

The Aylwin government also continued the privatization of so- 
cial security, begun by the military regime in 1981. By the end 
of Aylwin 's term, Chile's pension reform was the envy of the world. 
Officials from developing as well as developed nations were visit- 
ing Chile to see how it was done. By 1994 the system was manag- 
ing assets of US$19.2 billion, giving Chile a savings rate similar 
to some Asian nations. Thanks in large part to its pension fund, 
Chile now has a strong capital market consisting of stocks, bonds, 
and other financial instruments. 

As a democratic political model, the Aylwin government had a 
major handicap, namely the military, which, according to Arturo 
Valenzuela, has served as a virtually autonomous power within 
the government. With the help of its rightist allies in Congress, 
the military demonstrated its influence by derailing the Aylwin 
government's cautious but determined attempts to prosecute mili- 
tary officers for past human rights abuses. Aylwin refused to sup- 
port the enactment of a blanket amnesty law, such as the one 
approved by Uruguay's General Assembly for military officers ac- 
cused of human rights abuses committed between 1973 and 1978. 

The military's rightist allies in Congress also thwarted the Ayl- 
win government's attempts to enact reforms, such as one that would 
have eliminated the designated senators and another that would 
have replaced the military-designed binomial electoral system (see 
Glossary) with a system of proportional representation. Despite his 
setbacks in enacting reforms, Aylwin made good use of the strong 
presidential powers provided by the Pinochet-designed consti- 
tution. For example, he succeeded in enacting a constitutional 
reform law restoring the country's tradition of elected local gov- 
ernments and another limiting the power of the military courts to 
trying only those military personnel on active duty. 

Aylwin 's generally very successful presidency, particularly his 
handling of the economy, assured a continuation of democratic 
government under another politically moderate president, Eduardo 
Frei Ruiz-Tagle, the well-regarded son of Eduardo Frei Montalva 
(1964-70). one of Chile's most respected presidents. Frei Ruiz- 
Tagle entered politics only in 1989, when he ran successfully for 



xl 



a Senate seat from Santiago. He was elected PDC president in 1991 , 
winning 70 percent of the vote. Although a consensus candidate 
for the PDC presidency, Frei was particularly favored by the PDC's 
right-wing faction, popularly known as the guatones (fat men). The 
party's other factions — the left-wing's chascones (bushy-haired men) 
and the center's renovadores (renewalists) — favored other candidates. 

On May 23, 1993, Frei defeated his Socialist Party (Partido So- 
cialista) rival, Ricardo Lagos Escobar, to obtain the CPD's 
presidential nomination, with a lopsided vote of 60 percent to 38 
percent. Thanks in part to Aylwin's strong performance in the so- 
cial, economic, and political areas, in part to Frei's political in- 
heritance, and in part to continued divisiveness among the rightist 
parties, there was never any doubt that Frei would win. As chair- 
man of the Senate's key Finance and Budget Committee, Frei had 
earned a reputation as a fiscal moderate. His positive public rat- 
ing, according to a Center for Public Studies (Centro de Estudios 
Publicos — CEP)-Adimark poll of July 1993, was a remarkable 75 
percent, even higher than Aylwin's 73 percent positive rating. 

Indeed, Frei's coalition easily won the presidential election on 
December 11, 1993, with 57.4 percent of the vote, compared with 
24.7 percent for Arturo Alessandri Besa, Frei's closest challenger 
and candidate of the newly formed center-right coalition called the 
Union for the Progress of Chile (Union por el Progreso de Chile). 
Frei received the largest popular mandate of any Chilean leader 
since 1931. In sharp contrast to the presidential elections of Sep- 
tember 4, 1970, the unexciting elections of December 11, 1993, 
lacked left-wing and right-wing rhetoric. The vast majority of 
Chileans, enjoying Latin America's strongest economy, were ap- 
parently content to let the government remain in the hands of the 
political center, namely Frei Montalva's son. Although Frei Ruiz- 
Tagle, unlike his late father, is not known for his public oratory, 
Chileans regarded his low-key, nonconfrontational, and statesman- 
like campaigning style, as well as his penchant for consensus- 
building, as positive traits. 

Frei Ruiz-Tagle appears to have a better chance than Aylwin 
had to make the executive stronger vis-a-vis the military, not only 
because of his powerful mandate but also because the political right 
is becoming less protective of the military's prerogatives within the 
military-designed political system. In addition, Frei Ruiz-Tagle, 
unlike his father's rightist alliance, allied himself with the Socialist 
Party, thus strengthening social and political harmony. Never- 
theless, daunting challenges in the form of military resistance face 
Frei in his plans to seek to amend the Pinochet-era constitu- 
tion. These plans include abolishing the designated Senate seats, 



xli 



reforming the electoral system, and making the army commander, 
General Pinochet, and the other military commanders accounta- 
ble to elected officials. Frei's political agenda also includes less po- 
litically sensitive goals, such as improving secondary and higher 
education, consolidating Chile's political democracy, modernizing 
public services, and giving priority to rural development and eradi- 
cation of poverty. 

On the foreign front, Frei appears to be inclined to reverse Chile's 
uninterest in regional trade pacts. In particular, his government 
is reassessing the potential benefits of joining the Southern Cone 
Common Market (Mercado Comun del Cono Sur — Mercosur; see 
Glossary) and expects that Chile will become an associate mem- 
ber by January 1995. After the United States Congress ratified the 
North American Free Trade Agreement (NAFTA — see Glossary) 
in November 1993, Chile began lobbying to join a similar agree- 
ment with the United States (one that would drop the "North" 
from NAFTA), citing President William Jefferson Clinton's posi- 
tion that Chile is "next in line" to join NAFTA. Total bilateral 
trade between Chile and the United States amounted to US$4.1 
billion in 1993. 

Frei's coalition maintained a majority (seventy) of the 120 seats 
in the lower house of Congress, the Chamber of Deputies, but fell 
short of the eighty it needed for a two-thirds voting bloc. Its lack 
of majority support in the forty-six-member Senate also seemed 
to preclude passage of constitutional amendments, which require 
a three-fifths majority in both houses. Like its predecessor, the Frei 
government's efforts are likely to be hampered by the nonelected 
senators appointed by the Pinochet regime (of whom only eight 
are still serving) and by the binomial electoral system, which the 
military adopted for the 1989 elections in order to strengthen the 
hand of the rightists. 

Furthermore, unlike its pre-coup democracy, Chile's democracy 
of the 1990s is expected to remain fettered by a military with a 
strong institutional role in government, a military that will not likely 
tolerate a departure from the economic policies that constitute the 
principal accomplishment of its seventeen years in power. Even 
Frei's stated intention to push legislation to relieve the Copper Cor- 
poration (Corporacion del Cobre — Codelco) of its constitutional 
obligation to give the armed forces 10 percent of its annual earn- 
ings entails a risk of antagonizing the military. In 1993 this con- 
tribution amounted to US$197 million, almost one-fifth of the total 
defense budget. However, one casualty of a financial scandal at 
Codelco that broke in January 1994 could be the army. The cop- 
per unions asked the army to give up its 10 percent share of 

xlii 



Codelco's annual sales as a patriotic gesture. Although the army 
ignored this request, Congress was planning to discuss military 
spending later in the year, leaving open the possibility that the army 
could be compelled to make the sacrifice to head off additional bud- 
get cuts. 

Frei's relations with the military may determine how successful 
he is in achieving his stated objectives, but confrontation with the 
military does not appear to be his style. Indeed, in his address to 
Congress on May 21, 1994, Frei avoided the most controversial 
issue, his lack of power to appoint or dismiss the military com- 
manders. The only feasible resolution of the dilemma of Pinochet's 
continuing influence in government and what Frei's government 
refers to as "authoritarian enclaves" may need to await the general's 
scheduled retirement in 1997. Even then, Chile's transition to 
democracy will not be fully consolidated until reform of constitu- 
tional anachronisms, such as the immunity of military commanders 
from presidential dismissal, the binomial electoral system, and the 
designated senators. However, there is no guarantee that Pinochet's 
departure will allow for the rapid implementation of these needed 
reforms. 



September 15, 1994 Rex A. Hudson 



xliii 



Chapter 1. Historical Setting 



A textile figure depicting a tree ftemu, meaning the tree Temu divaricatum), 
from a seventeenth- century Mapuche woman 3 s belt called nimintrariiwe 



FROM ONE OF THE MOST neglected outposts of the Spanish 
Empire, Chile developed into one of the most prosperous and 
democratic nations in Latin America. Throughout its history, 
however, Chile has depended on great external powers for economic 
exchange and political influence: Spain in the colonial period, Brit- 
ain in the nineteenth century, and the United States in the twen- 
tieth century. 

Chile's dependence is made most evident by the country's heavy 
reliance on exports. These have included silver and gold in the 
colonial period, wheat in the mid-nineteenth century, nitrates up 
to World War I, copper after the 1930s, and a variety of commodi- 
ties sold overseas in more recent years. The national economy's 
orientation toward the extraction of primary products has gone hand 
in hand with severe exploitation of workers. Beginning with the 
coerced labor of native Americans during the Spanish conquest, 
the exploitation continued with mestizo (see Glossary) peonage on 
huge farms in the eighteenth and nineteenth centuries and brutal 
treatment of miners in the north in the first decade of the twen- 
tieth century. The most recent victimization of workers occurred 
during the military dictatorship of Augusto Pinochet Ugarte (1973- 
90), when unions were suppressed and wages were depressed, un- 
employment increased, and political parties were banned. 

Another persistent feature of Chile's economic history has been 
the conflict over land in the countryside, beginning when the 
Spaniards displaced the indigenous people during their sixteenth- 
century conquest. Later chapters of this struggle have included the 
expansion of the great estates during the ensuing four centuries 
and the agrarian reform efforts of the 1960s and 1970s. 

Politically, Chile has also conformed to several patterns. Since 
winning independence in 1818, the nation has had a history of 
civilian rule surpassed by that of few countries in the world. In 
the nineteenth century, Chile became the first country in Latin 
America to install a durable constitutional system of government, 
which encouraged the development of an array of political parties. 
Military intervention in politics has been rare in Chile, occurring 
only at times of extraordinary social crisis, as in 1891, 1924, 1925, 
1932, and 1973. These interventions often brought about massive 
transformations; all the fundamental changes in the Chilean poli- 
tical system and its constitutions have occurred with the interven- 
tion of the armed forces, acting in concert with civilian politicians. 



3 



Chile: A Country Study 



From 1932 to 1973, Chile built on its republican tradition by 
sustaining one of the most stable, reformist, and representative 
democracies in the world. Although elitist and conservative in some 
respects, the political system provided for the peaceful transfer of 
power and the gradual incorporation of new contenders. Under- 
girding that system were Chile's strong political parties, which were 
often attracted to foreign ideologies and formulas. Having thorough- 
ly permeated society, these parties were able to withstand crushing 
blows from the Pinochet regime of 1973-90. 

Republican political institutions were able to take root in Chile 
in the nineteenth century before new social groups demanded par- 
ticipation. Contenders from the middle and lower classes gradually 
were assimilated into an accommodating political system in which 
most disputes were settled peacefully, although disruptions related 
to the demands of workers often met a harsh, violent response. The 
system expanded to incorporate more and more competing regional, 
anticlerical, and economic elites in the nineteenth century. The 
middle classes gained political offices and welfare benefits in the 
opening decades of the twentieth century. From the 1920s to the 
1940s, urban laborers obtained unionization rights and partici- 
pated in reformist governments. In the 1950s, women finally ex- 
ercised full suffrage and became a decisive electoral force. And by 
the 1960s, rural workers achieved influence with reformist parties, 
widespread unionization, and land reform. 

As the political system evolved, groups divided on either side 
of six main issues. The first and most important in the nineteenth 
century was the role of the Roman Catholic Church in political, 
social, and economic affairs. Neither of the two major parties, the 
Conservative Party and the Liberal Party, opposed the practice 
of Catholicism. However, the Conservatives defended the church's 
secular prerogatives; the Liberals (and later the Nationals, Radi- 
cals, Democrats, and Marxists) took anticlerical positions. 

The second source of friction was regionalism, although less viru- 
lent than in some larger Latin American countries. In the north 
and south, reform groups became powerful, especially the Con- 
servatives holding sway in Chile's Central Valley (Valle Central), 
who advocated opposition to the establishment. Regional groups 
made a significant impact on political life in Chile: they mobilized 
repeated rebellions against the central government from the 1830s 
through the 1850s; helped replace a centralizing president with a 
political system dominated by the National Congress (hereafter, 
Congress) and local bosses in the 1890s; elected Arturo Alessandri 
Palma (1920-24, 1925, 1932-38) as the chief executive representing 
the north against the central oligarchy in 1920; and cast exceptional 



4 



Historical Setting 



percentages of their ballots for reformist and leftist candidates (es- 
pecially Radicals, Communists, and Socialists) from the 1920s to 
the 1970s. Throughout the twentieth century, leaders outside San- 
tiago also pleaded for administrative decentralization until the 
Pinochet government devolved greater authority on provincial and 
municipal governments and even moved Congress from Santiago 
to Valparaiso. 

The third issue dividing Chileans — social class — grew in impor- 
tance from the nineteenth century to the twentieth century. Although 
both the Conservatives and the Liberals represented the upper stra- 
tum, in the nineteenth century the Radicals began to speak on 
behalf of many in the middle class, and the Democrats built a base 
among urban artisans and workers. In the twentieth century, the 
Socialists and Communists became the leaders of organized labor. 
Along with the Christian Democratic Party, these parties attracted 
adherents among impoverished people in the countryside and the 
urban slums. 

In the twentieth century, three other issues became salient, 
although not as significant as divisions over social class, regional- 
ism, or the role of the church. One was the cleavage between city 
and country, which was manifested politically by the leftist par- 
ties' relative success in the urban areas and by the rightist groups 
in the countryside. Another source of strife was ideology; most 
Chilean parties after World War I sharply defined themselves in 
terms of programmatic and philosophical differences, often imported 
from abroad, including liberalism, Marxism, corporatism (see Glos- 
sary), and communitarianism (see Glossary). Gender also became 
a political issue and divider. After women began voting for presi- 
dent in 1952, they were more likely than men to cast ballots for 
rightist or centrist candidates. 

As Chile's political parties grew, they attracted followers not only 
on the basis of ideology but also on the basis of patron-client rela- 
tionships between candidates and voters. These ties were particu- 
larly important at the local level, where mediation with government 
agencies, provision of public employment, and delivery of public 
services were more crucial than ideological battles waged on the 
national stage. Over generations, these bonds became tightly woven, 
producing within the parties fervent and exclusive subcultures nur- 
tured in the family, the community, and the workplace. As a result, 
by the mid-twentieth century the parties had politicized schools, 
unions, professional associations, the media, and virtually all other 
components of national life. The intense politicization of modern 
Chile has its roots in events of the nineteenth century. 



5 



Chile: A Country Study 

During the colonial period and most of the twentieth century, 
the central state played an active role in the economy until many 
of its functions were curtailed by the military government of General 
Pinochet. State power was highly centralized from the 1830s to the 
1970s, to the ire of the outlying provinces. 

Although normally governed by civilians, Chile has been 
militaristic in its dealings with native peoples, workers, and neigh- 
boring states. In the twentieth century, it has been a supporter of 
arbitration in international disputes. In foreign policy, Chile has 
long sought to be the strongest power on the Pacific Coast of South 
America, and it has always shied away from diplomatic entangle- 
ments outside the Americas. 

Pre-Columbian Civilizations 

At the time the Spanish arrived, a variety of Amerindian socie- 
ties inhabited what is now Chile. No elaborate, centralized, seden- 
tary civilization reigned supreme, even though the Inca Empire 
had penetrated the northern land of the future state. As the 
Spaniards would after them, the Incas encountered fierce resistance 
from the indigenous Araucanians, particularly the Mapuche tribe, 
and so did not exert control in the south. During their attempts 
at conquest in 1460 and 1491, the Incas established forts in the 
Central Valley of Chile, but they could not colonize the region. 
In the north, the Incas were able to collect tribute from small groups 
of fishermen and oasis farmers but were not able to establish a strong 
cultural presence. 

The Araucanians, a fragmented society of hunters, gatherers, 
and farmers, constituted the largest native American group in Chile. 
A mobile people who engaged in trade and warfare with other in- 
digenous groups, they lived in scattered family clusters and small 
villages. Although the Araucanians had no written language, they 
did use a common language. Those in what became central Chile 
were more settled and more likely to use irrigation. Those in the 
south combined slash-and-burn agriculture with hunting. 

The Araucanians, especially those in the south, became famous 
for their staunch resistance to the seizure of their territory. Scholars 
speculate that their total population may have numbered 1 million 
at most when the Spaniards arrived in the 1530s; a century of Euro- 
pean conquest and disease reduced that number by at least half. 
During the conquest, the Araucanians quickly added horses and 
European weaponry to their arsenal of clubs and bows and arrows. 
They became adept at raiding Spanish settlements and, albeit in 
declining numbers, managed to hold off the Spaniards and their 
descendants until the late nineteenth century. 



6 



Historical Setting 



The Araucanians' valor inspired the Chileans to mythologize 
them as the nation's first national heroes, a status that did nothing, 
however, to elevate the wretched living standard of their descen- 
dants. Of the three Araucanian groups, the one that mounted the 
most resistance to the Spanish was the Mapuche, meaning "people 
of the land." 

Conquest and Colonization, 1535-1810 
Politics and War in a Frontier Society 

Chile's first known European discoverer, Ferdinand Magellan, 
stopped there during his voyage on October 21 , 1520. A concerted 
attempt at colonization began when Diego de Almagro, a compan- 
ion of conqueror Francisco Pizarro, headed south from Peru in 
1535. Disappointed at the dearth of mineral wealth and deterred 
by the pugnacity of the native population in Chile, Almagro 
returned to Peru in 1537, where he died in the civil wars that took 
place among the conquistadors. 

The second Spanish expedition from Peru to Chile was begun 
by Pedro de Valdivia in 1540. Proving more persistent than 
Almagro, he founded the capital city of Santiago on February 12, 
1541. Valdivia managed to subdue many northern Amerindians, 
forcing them to work in mines and fields. He had far less success 
with the Araucanians of the south, however. 

Valdivia (1541-53) became the first governor of the Captaincy 
General of Chile, which was the colonial name until 1609. In that 
post, he obeyed the viceroy of Peru and, through him, the king 
of Spain and his bureaucracy. Responsible to the governor, town 
councils known as cabildos administered local municipalities, the 
most important of which was Santiago, which was the seat of a 
royal audiencia (see Glossary) from 1609 until the end of colonial rule. 

Seeking more precious metals and slave labor, Valdivia estab- 
lished fortresses farther south. Being so scattered and small, 
however, they proved difficult to defend against Araucanian attack. 
Although Valdivia found small amounts of gold in the south, he rea- 
lized that Chile would have to be primarily an agricultural colony. 

In December 1553, an Araucanian army of warriors, organized 
by the legendary Mapuche chief Lautaro (Valdivia' s former ser- 
vant), assaulted and destroyed the fort of Tucapel. Accompanied 
by only fifty soldiers, Valdivia rushed to the aid of the fort, but 
all his men perished at the hands of the Mapuche in the Battle of 
Tucapel. Valdivia himself fled but was later tracked down, tor- 
tured, and killed by Lautaro. Although Lautaro was killed by 
Spaniards in the Battle of Mataquito in 1557, his chief, Caupolican, 



7 



Chile: A Country Study 

continued the fight until his capture by treachery and his subse- 
quent execution by the Spaniards in 1558. The uprising of 1553-58 
became the most famous instance of Araucanian resistance; Lau- 
taro in later centuries became a revered figure among Chilean na- 
tionalists. It took several more years to suppress the rebellion. 
Thereafter, the Araucanians no longer threatened to drive the Span- 
ish out, but they did destroy small settlements from time to time. 
Most important, the Mapuche held on to their remaining territory 
for another three centuries. 

Despite inefficiency and corruption in the political system, 
Chileans, like most Spanish Americans, exhibited remarkable 
loyalty to crown authority throughout nearly three centuries of 
colonial rule. Chileans complained about certain policies or offi- 
cials but never challenged the regime. It was only when the king 
of Spain was overthrown at the beginning of the nineteenth century 
that Chileans began to consider self-government. 

Chileans resented their reliance on Peru for governance, trade, 
and subsidies, but not enough to defy crown authority. Many 
Chilean criollos (creoles, or Spaniards born in the New World) also 
resented domination by the peninsulares (Spaniards, usually officials, 
born in the Old World and residing in an overseas colony), espe- 
cially in the sinecures of royal administration. However, local 
Chilean elites, especially landowners, asserted themselves in pol- 
itics well before any movement for independence. Over time, these 
elites captured numerous positions in the local governing appara- 
tus, bought favors from the bureaucracy, co-opted administrators 
from Spain, and came to exercise informal authority in the coun- 
tryside. 

Society in Chile was sharply divided along ethnic, racial, and 
class lines. Peninsulares and criollos dominated the tiny upper class. 
Miscegenation between Europeans and the indigenous people 
produced a mestizo population that quickly outnumbered the 
Spaniards. Farther down the social ladder were a few African slaves 
and large numbers of native Americans. 

The Roman Catholic Church served as the main buttress of the 
government and the primary instrument of social control. Com- 
pared with its counterparts in Peru and Mexico, the church in Chile 
was not very rich or powerful. On the frontier, missionaries were 
more important than the Catholic hierarchy. Although usually it 
supported the status quo, the church produced the most impor- 
tant defenders of the indigenous population against Spanish atroci- 
ties. The most famous advocate of human rights for the native 
Americans was a Jesuit, Luis de Valdivia (no relation to Pedro 



8 



Pedro de Valdivia, 
founder of Santiago 
and Chile's first governor 
Courtesy Embassy of 
Chile, Washington 




de Valdivia), who struggled, mostly in vain, to improve their lot 
in the period 1593-1619. 

Cut off to the north by desert, to the south by the Araucanians, 
to the east by the Andes Mountains, and to the west by the ocean, 
Chile became one of the most centralized, homogeneous colonies 
in Spanish America. Serving as a sort of frontier garrison, the colony 
found itself with the mission of forestalling encroachment by Arau- 
canians and by Spain's European enemies, especially the British 
and the Dutch. In addition to the Araucanians, buccaneers and 
English adventurers menaced the colony, as was shown by Sir Fran- 
cis Drake's 1578 raid on Valparaiso, the principal port. Because 
Chile hosted one of the largest standing armies in the Americas, 
it was one of the most militarized of the Spanish possessions, as 
well as a drain on the treasury of Peru. 

Throughout the colonial period, the Spaniards engaged in frontier 
combat with the Araucanians, who controlled the territory south 
of the Rio Bio-Bio (about 500 kilometers south of Santiago) and 
waged guerrilla warfare against the invaders. During many of those 
years, the entire southern region was impenetrable by Europeans. 
In the skirmishes, the Spaniards took many of their defeated foes 
as slaves. Missionary expeditions to Christianize the Araucanians 
proved risky and often fruitless. 

Most European relations with the native Americans were hostile, 
resembling those later existing with nomadic tribes in the United 

9 



Chile: A Country Study 



States. The Spaniards generally treated the Mapuche as an enemy 
nation to be subjugated and even exterminated, in contrast to the 
way the Aztecs and the Incas treated the Mapuche, as a pool of 
subservient laborers. Nevertheless, the Spaniards did have some 
positive interaction with the Mapuche. Along with warfare, there 
also occurred some miscegenation, intermarriage, and accultura- 
tion between the colonists and the indigenous people. 

The Colonial Economy 

The government played a significant role in the colonial economy. 
It regulated and allocated labor, distributed land, granted monop- 
olies, set prices, licensed industries, conceded mining rights, created 
public enterprises, authorized guilds, channeled exports, collect- 
ed taxes, and provided subsidies. Outside the capital city, however, 
colonists often ignored or circumvented royal laws. In the coun- 
tryside and on the frontier, local landowners and military officers 
frequently established and enforced their own rules. 

The economy expanded under Spanish rule, but some criollos 
complained about royal taxes and limitations on trade and produc- 
tion. Although the crown required that most Chilean commerce 
be with Peru, smugglers managed to sustain some illegal trade with 
other American colonies and with Spain itself. Chile exported to 
Lima small amounts of gold, silver, copper, wheat, tallow, hides, 
flour, wine, clothing, tools, ships, and furniture. Merchants, 
manufacturers, and artisans became increasingly important to the 
Chilean economy. 

Mining was significant, although the volume of gold and silver 
extracted in Chile was far less than the output of Peru or Mexico. 
The conquerors appropriated mines and washings from the native 
people and coerced them into extracting the precious metal for the 
new owners. The crown claimed one-fifth of all the gold produced, 
but the miners frequently cheated the treasury. By the seventeenth 
century, depleted supplies and the conflict with the Araucanians 
reduced the quantity of gold mined in Chile. 

Because precious metals were scarce, most Chileans worked in 
agriculture. Large landowners became the local elite, often main- 
taining a second residence in the capital city. Traditionally, most 
historians have considered these great estates (called haciendas or 
fundos) inefficient and exploitive, but some scholars have claimed 
that they were more productive and less cruel than is convention- 
ally depicted. 

The haciendas initially depended for their existence on the land 
and labor of the indigenous people. As in the rest of Spanish Ame- 
rica, crown officials rewarded many conquerors according to the 



10 



Historical Setting 



encomienda (see Glossary) system, by which a group of native Ameri- 
cans would be commended or consigned temporarily to their care. 
The grantees, called encomenderos, were supposed to Christianize 
their wards in return for small tribute payments and service, but 
they usually took advantage of their charges as laborers and ser- 
vants. Many encomenderos also appropriated native lands. Through- 
out the sixteenth and seventeenth centuries, the encomenderos fended 
off attempts by the crown and the church to interfere with their 
exploitation of the indigenous people. 

The Chilean colony depended heavily on coerced labor, whether 
it was legally slave labor or, like the wards of the encomenderos, nomi- 
nally free. Wage labor initially was rare in the colonial period; it 
became much more common in the eighteenth and nineteenth cen- 
turies. Because few native Americans or Africans were available, 
the mestizo population became the main source of workers for the 
growing number of latifundios (see Glossary), which were basically 
synonymous with haciendas. 

Those workers attached to the estates as tenant farmers became 
known as inquilinos. Many of them worked outside the cash econo- 
my, dealing in land, labor, and barter. The countryside was also 
populated by small landholders (minifundistas), migrant workers 
(afuerinos), and a few Mapuche holding communal lands (usually 
under legal title). 

Bourbon Reforms, 1759-96 

The Habsburg dynasty's rule over Spain ended in 1700. The 
Habsburgs' successors, the French Bourbon monarchs, reigned for 
the rest of the colonial period. In the second half of the eighteenth 
century, they tried to restructure the empire to improve its produc- 
tivity and defense. The main period of Bourbon reforms in Chile 
lasted from the coronation of Charles III (1759-88) in Spain to 
the end of Governor Ambrosio O'Higgins y Ballenary's tenure in 
Chile (1788-96). 

The Bourbon rulers gave the audiencia of Chile (Santiago) greater 
independence from the Viceroyalty of Peru (see fig. 2). One of the 
most successful governors of the Bourbon era was the Irish-born 
O'Higgins, whose son Bernardo would lead the Chilean indepen- 
dence movement. Ambrosio O'Higgins promoted greater self- 
sufficiency of both economic production and public administration, 
and he enlarged and strengthened the military. In 1791 he also 
outlawed encomiendas and forced labor. 

The Bourbons allowed Chile to trade more freely with other colo- 
nies, as well as with independent states. Exchange increased with 
Argentina after it became the Viceroyalty of the Rio de la Plata 



11 



Chile: A Country Study 




Source: Based on information from A. Curtis Wilgus, Historical Atlas of Latin America, New 
York, 1967, 112. 



Figure 2. Three South American Viceroy alties, ca. 1800 

in 1776. Ships from the United States and Europe were engaging 
in direct commerce with Chile by the end of the eighteenth cen- 
tury. However, the total volume of Chilean trade remained small 
because the colony produced few items of high unit value to out- 
siders. 

Freer trade brought with it greater knowledge of politics abroad, 
especially the spread of liberalism in Europe and the creation of 
the United States. Although a few members of the Chilean elite 
flirted with ideals of the Enlightenment, most of them held fast to 
the traditional ideology of the Spanish crown and its partner, the 
Roman Catholic Church. Notions of democracy and independence, 



12 



Historical Setting 



let alone Protestantism, never reached the vast majority of mesti- 
zos and native Americans, who remained illiterate and subordinate. 

Wars of Independence, 1810-18 

Aristocratic Chileans began considering independence only when 
the authority and legitimacy of the crown were cast in doubt by 
Napoleon Bonaparte's invasion of Spain in 1807. Napoleon replaced 
the Spanish king with his brother, Joseph Bonaparte. On the penin- 
sula, Spanish loyalists formed juntas that claimed they would govern 
both the motherland and the colonies until the rightful king was 
restored. Thus, Chileans, like other Spanish Americans, had to 
confront the dilemma of who was in charge in the absence of the 
divine monarch: the French pretender to the throne, the Spanish 
rebels, or local leaders. The latter option was tried on September 
18, 1810, a date whose anniversary is celebrated as Chile's indepen- 
dence day. On that day, the criollo leaders of Santiago, employ- 
ing the town council as a junta, announced their intention to govern 
the colony until the king was reinstated. They swore loyalty to the 
ousted monarch, Ferdinand VII, but insisted that they had as much 
right to rule in the meantime as did subjects of the crown in Spain 
itself. They immediately opened the ports to all traders. 

Chile's first experiment with self-government, the Old Fatherland 
(Patria Vieja, 1810-14), was led by Jose Miguel Carrera Verdugo 
(president, 1812-13), an aristocrat in his mid- twenties. The military- 
educated Carrera was a heavy-handed ruler who aroused widespread 
opposition. One of the earliest advocates of full independence, Ber- 
nardo O'Higgins Riquelme, captained a rival faction that plunged 
the criollos into civil war. For him and for certain other members 
of the Chilean elite, the initiative for temporary self-rule quickly es- 
calated into a campaign for permanent independence, although other 
criollos remained loyal to Spain. Among those favoring indepen- 
dence, conservatives fought with liberals over the degree to which 
French revolutionary ideas would be incorporated into the move- 
ment. After several efforts, Spanish troops from Peru took advan- 
tage of the internecine strife to reconquer Chile in 1814, when they 
reasserted control by winning the Battle of Rancagua on October 
2. O'Higgins and many of the Chilean rebels escaped to Argentina. 

During the Reconquest (La Reconquista) of 1814-17, the harsh 
rule of the Spanish loyalists, who punished suspected rebels, drove 
more Chileans into the insurrectionary camp. More and more mem- 
bers of the Chilean elite were becoming convinced of the necessity 
of full independence, regardless of who sat on the throne of Spain. 
As the leader of guerrilla raids against the Spaniards, Manuel 
Rodriguez became a national symbol of resistance. 



13 



Chile: A Country Study 



When criollos sang the praises of equality and freedom, however, 
they meant equal treatment for themselves in relation to the penin- 
sulares and liberation from Spanish rule, not equality or freedom 
for the masses of Chileans. The criollos wanted to assume leader- 
ship positions previously controlled by peninsulares without upsetting 
the existing social and economic order. In that sense, the struggle 
for independence was a war within the upper class, although the 
majority of troops on both sides consisted of conscripted mestizos 
and native Americans. 

In exile in Argentina, O'Higgins joined forces with Jose de San 
Martin, whose army freed Chile with a daring assault over the 
Andes in 1817, defeating the Spaniards at the Battle of Chacabu- 
co on February 12. San Martin considered the liberation of Chile 
a strategic stepping-stone to the emancipation of Peru, which he 
saw as the key to hemispheric victory over the Spanish. Chile won 
its formal independence when San Martin defeated the last large 
Spanish force on Chilean soil at the Battle of Maipu on April 5, 
1818. San Martin then led his Argentine and Chilean followers 
north to liberate Peru; fighting continued in Chile's southern 
provinces, the bastion of the royalists, until 1826 (see Genesis of 
the Armed Forces, 1814-36, ch. 5). 

Civil Wars, 1818-30 

From 1817 to 1823, Bernardo O'Higgins ruled Chile as supreme 
director (president). He won plaudits for defeating royalists and 
founding schools, but civil strife continued. O'Higgins alienated 
Liberals and provincials with his authoritarianism, Conservatives 
and the church with his anticlericalism, and landowners with his 
proposed reforms of the land tenure system. His attempt to devise 
a constitution in 1818 that would legitimize his government failed, 
as did his effort to generate stable funding for the new administra- 
tion. O'Higgins's dictatorial behavior aroused resistance in the 
provinces. This growing discontent was reflected in the continu- 
ing opposition of partisans of Carrera, who was executed by the 
Argentine regime in Mendoza in 1821, as were his two brothers 
three years earlier. 

Although opposed by many Liberals, O'Higgins angered the Ro- 
man Catholic Church with his liberal beliefs. He maintained 
Catholicism's status as the official state religion but tried to curb 
the church's political powers and to encourage religious tolerance 
as a means of attracting Protestant immigrants and traders. Like 
the church, the landed aristocracy felt threatened by O'Higgins, 
resenting his attempts to eliminate noble titles and, more impor- 
tant, to eliminate entailed estates. 



14 



Bernardo O'Higgins Riquelme, 
father of Chile 
Courtesy Embassy of 
Chile, Washington 



O'Higgins's opponents also disapproved of his diversion of 
Chilean resources to aid San Martin's liberation of Peru. O'Higgins 
insisted on supporting that campaign because he realized that 
Chilean independence would not be secure until the Spaniards were 
routed from the Andean core of the empire. However, amid mount- 
ing discontent, troops from the northern and southern provinces 
forced O'Higgins to resign. Embittered, O'Higgins departed for 
Peru, where he died in 1842. 

After O'Higgins went into exile in 1823, civil conflict continued, 
focusing mainly on the issues of anticlericalism and regionalism. 
Presidents and constitutions rose and fell quickly in the 1820s. The 
civil struggle's harmful effects on the economy, and particularly 
on exports, prompted Conservatives to seize national control in 1830. 

In the minds of most members of the Chilean elite, the bloodshed 
and chaos of the late 1820s were attributable to the shortcomings 
of liberalism and federalism, which had been dominant over con- 
servatism for most of the period. The abolition of slavery in 1823 — 
long before most other countries in the Americas — was considered 
one of the Liberals' few lasting achievements. One Liberal leader 
from the south, Ramon Freire Serrano, rode in and out of the 
presidency several times (1823-27, 1828, 1829, 1830) but could 
not sustain his authority. From May 1827 to September 1831, with 
the exception of brief interventions by Freire, the presidency was 
occupied by Francisco Antonio Pinto Diaz, Freire 's former vice 



15 



Chile: A Country Study 



president. In August 1828, Pinto's first year in office, Chile aban- 
doned its short-lived federalist system for a unitary form of govern- 
ment, with separate legislative, executive, and judicial branches. 
By adopting a moderately liberal constitution in 1828, Pinto alienat- 
ed both the Federalists and the Liberal factions. He also angered 
the old aristocracy by abolishing estates inherited by primogeni- 
ture (mayorazgo — see Glossary) and caused a public uproar with his 
anticlericalism. After the defeat of his liberal army at the Battle 
of Lircay on April 17, 1830, Freire, like O'Higgins, went into ex- 
ile in Peru. 

Aristocratic Republicanism, 1830-91 

Scholars have long pondered why Chile was the first country in 
Latin America to achieve stable civilian rule in a constitutional, 
electoral, representative republic. They have also asked why Chile 
was more successful at constitutional government thereafter than its 
neighbors. One part of the answer is that Chile had fewer obstacles 
to overcome because it was less disturbed by regional, church- state, 
and ethnic conflicts. The geographically compact and relatively 
homogeneous population was easier to manage than the far-flung 
groups residing in many of the other new states of the hemisphere. 
As the nineteenth century wore on, slow settlement of the fron- 
tiers to the north and south provided a safety valve without crea- 
ting a challenge to the dominance of the Central Valley. 

As with regionalism, the church issue that rent many of the new 
republics was also muted in Chile, where the Catholic Church had 
never been very wealthy or powerful. Some historians would also 
argue that Chilean criollos, because they lived on the fringe of the 
empire, had more experience at self-government during the colonial 
period. In addition, the Chilean elite was less fearful than many 
other Spanish Americans that limited democracy would open the 
door to uprisings by massive native or black subject classes. At the 
same time, the ruling class was cohesive and confident, its mem- 
bers connected by familial and business networks. The elite was 
powerful partly because it controlled the main exports, until foreign- 
ers took over trade late in the nineteenth century. The rapid recov- 
ery of the export economy from the devastation of the wars of 
independence also helped, as economic and political success and 
stability became mutually reinforcing. Capitalizing on these ad- 
vantages, however, would require shrewd and ruthless political en- 
gineers, victory in a war against Chile's neighbors, continued 
economic growth, and some luck in the design, timing, and se- 
quence of political change. 



16 



Historical Setting 



The Conservative Era, 1830-61 

Members of the first political parties, the Conservatives (pelu- 
cones, or bigwigs) and the Liberals (pipiolos, or novices), began to 
coalesce around the church-state issue. Not only more favorably 
inclined toward the church, the Conservatives were also more sym- 
pathetic than the Liberals toward the colonial legacy, authoritarian 
government, the supremacy of executive powers, and a unitary 
state. After their victory at the Battle of Lircay, the Conservatives 
took charge, spearheaded by a Valparaiso merchant, Diego Por- 
tales Palazuelos. 

The Portalian State, 1830-37 

Although never president, Portales dominated Chilean politics 
from the cabinet and behind the scenes from 1830 to 1837. He in- 
stalled the "autocratic republic," which centralized authority in 
the national government. His political program enjoyed support 
from merchants, large landowners, foreign capitalists, the church, 
and the military. Political and economic stability reinforced each 
other as Portales encouraged economic growth through free trade 
and put government finances in order. 

Portales was an agnostic who said that he believed in the clergy 
but not in God. He realized the importance of the Roman Catholic 
Church as a bastion of loyalty, legitimacy, social control, and sta- 
bility, as had been the case in the colonial period. He repealed Liber- 
al reforms that had threatened church privileges and properties. 

Portales brought the military under civilian control by reward- 
ing loyal generals, cashiering troublemakers, and promoting a vic- 
torious war against the Peru-Bolivia Confederation (1836-39). After 
defeating Peru and Bolivia, Chile dominated the Pacific Coast of 
South America. The victory over its neighbors gave Chile and its 
new political system a psychological boost. Chileans experienced 
a surge of national enthusiasm and cohesion behind a regime ac- 
cepted as legitimate and efficacious. 

Portales also achieved his objectives by wielding dictatorial pow- 
ers, censoring the press, and manipulating elections. For the next 
forty years, Chile's armed forces would be distracted from med- 
dling in politics by skirmishes and defensive operations on the 
southern frontier, although some units got embroiled in domestic 
conflicts in 1851 and 1859. In later years, conservative Chileans 
canonized Portales as a symbol of order and progress, exaggerat- 
ing the importance of one man in that achievement. 

The "Portalian State" was institutionalized by the 1833 consti- 
tution. One of the most durable charters ever devised in Latin 



17 



Chile: A Country Study 

America, the Portalian constitution lasted until 1925. The consti- 
tution concentrated authority in the national government — more 
precisely, in the hands of the president, who was elected by a tiny 
minority. The chief executive could serve two consecutive five-year 
terms and then pick a successor. Although Congress had signifi- 
cant budgetary powers, it was overshadowed by the president, who 
appointed provincial officials. The constitution also created an in- 
dependent judiciary, guaranteed inheritance of estates by primo- 
geniture, and installed Catholicism as the state religion. In short, 
it established an autocratic system under a republican veneer. 

The first Portalian president was General Joaquin Prieto Vial, 
who served two terms (1831-36, 1836-41). President Prieto had 
four main accomplishments: implementation of the 1833 consti- 
tution, stabilization of government finances, defeat of provincial 
challenges to central authority, and victory over the Peru-Bolivia 
Confederation. During the presidencies of Prieto and his two suc- 
cessors, Chile modernized through the construction of ports, rail- 
roads, and telegraph lines, some built by United States entrepreneur 
William Wheelwright. These innovations facilitated the export- 
import trade as well as domestic commerce. 

Prieto and his adviser, Portales, feared the efforts of Bolivian 
general Andres de Santa Cruz y Calahumana to unite with Peru 
against Chile. These qualms exacerbated animosities toward Peru 
dating from the colonial period, now intensified by disputes over 
customs duties and loans. Chile also wanted to become the dominant 
South American military and commercial power along the Pacific. 
Portales got Congress to declare war on Peru in 1836. When a 
Chilean colonel who opposed the war killed Portales in 1837, this 
act and the suspicion that Peruvians were involved in the assassi- 
nation plot inspired an even greater war effort by the government. 

Two Conservative Presidencies, 1841-61 

Chile defeated the Peruvian fleet at Casma, Peru, on January 
12, 1839, and the Bolivian army at Yungay, Peru, on January 20. 
These Chilean victories destroyed the Peru-Bolivia Confederation, 
made Chile lord of the west coast, brought unity and patriotism 
to the Chilean elites, and gave Chile's armed forces pride and pur- 
pose as a military with an external mission. The successful war 
also helped convince the European powers and the United States 
to respect Chile's coastal sphere of influence. Subsequently, the 
country won additional respect from the European powers and the 
United States by giving them economic access and concessions, 
by treating their citizens well, and by generally playing them off 
against each other. 



18 



A church in 
Chiuchiu in 
northern Chile 
Courtesy Embassy of 
Chile, Washington 




Since its inception, the Portalian State has been criticized for 
its authoritarianism. But it has also been praised for the stability, 
prosperity, and international victories it brought to Chile, as well 
as the gradual opening to increased democracy that it provided. 
At least in comparison with most other regimes of the era, the Por- 
talian State was noteworthy for being dominated by constitutional 
civilian authorities. Although Portales deserves some credit for 
launching the system, his successors were the ones who truly im- 
plemented, institutionalized, legitimized, and consolidated it. From 
1831 to 1861, no other country in Spanish America had such a 
regular and constitutional succession of chief executives. 

Manuel Bulnes Prieto (president, 1841-51), hero of the victo- 
ries over the Chilean Liberals at the Battle of Lircay in 1830 and 
over the Bolivian army at Yungay in 1839, became president in 
1841. As a decorated general, he was the ideal choice to consoli- 
date the Portalian State and establish presidential control over the 
armed forces. He reduced the size of the military and solidified 
its loyalty to the central government in the face of provincial up- 
risings. As a southerner, he was able to defuse regional resentment 
of the dominant Santiago area. Although Bulnes staffed his two 
administrations mainly with Conservatives, he conciliated his oppo- 
nents by including a few Liberals. He strengthened the new politi- 
cal institutions, especially Congress and the judiciary, and gave 
legitimacy to the constitution by stepping down at the end of his 



19 



Chile: A Country Study 

second term in office. Placing the national interest above regional 
or military loyalties, he also helped snuff out a southern rebellion 
against his successor. 

Intellectual life blossomed under Bulnes, thanks in part to the 
many exiles who came to Chile from less stable Spanish American 
republics. They clustered around the University of Chile (found- 
ed in 1842), which developed into one of the most prestigious educa- 
tional institutions in Latin America. Both foreigners and nationals 
formed the "Generation of 1842," led mainly by Liberal intellec- 
tuals and politicians such as Francisco Bilbao Barguin and Jose 
Victorino Lastarria Santander. Through the Society of Equality, 
members of the group called for expanded democracy and reduced 
church prerogatives. In particular, they defended civil liberties and 
freedom of the press, seeking to constrain the government's 
authoritarian powers. 

Bulnes presided over continued prosperity, as production from 
the farms and mines increased, both for external and for internal 
consumption. In response to foreign demand, especially for wheat 
during the California and Australia gold rushes, agricultural ex- 
ports increased. Instead of importing scarce and expensive modern 
capital and technology, landowners expanded production. They 
did this primarily by enlarging their estates and absorbing more 
peasants into their work forces, especially in the central provinces, 
where the vast majority of Chileans toiled in agriculture. This ex- 
pansion fortified the hacienda system and increased the numbers 
of people attached to it. The growth of the great estates also in- 
creased the political power of the landed elites, who succeeded in 
exercising a veto over agrarian reform for a century. 

In the mid- 1800s, the rural labor force, mainly mestizos, was 
a cheap and expanding source of labor. More and more of these 
laborers became tenant farmers (inquilinos). For a century there- 
after, many workers would remain bound to the haciendas through 
tradition, lack of alternatives, and landowner collusion and coer- 
cion. Itinerant rural workers and even small landowners became 
increasingly dependent on the great estates, whether through part- 
time or full-time work. The landed elites also inhibited industri- 
alization by their preference for free trade and the low wages they 
paid their workers, which hindered rural consumers from accumu- 
lating disposable income. For a century, the lack of any signifi- 
cant challenge to this exploitive system was one of the pillars of 
the social and political hierarchy. 

Liberals and regionalists unsuccessfully took up arms against Bul- 
nes' s Conservative successor, Manuel Montt Torres (president, 
1851-61). Thousands died in one of the few large civil wars in 



20 



Historical Setting 



nineteenth-century Chile. The rebels of 1851 denounced Montt's 
election as a fraud perpetrated by the centralist forces in and around 
Santiago. Some entrepreneurs in the outlying provinces also backed 
the rebellion out of anger at the government's neglect of economic 
interests outside the sphere of the central landowning elites. Montt 
put down the uprising with help from British commercial ships. 

From 1851 to 1861, Montt completed the construction of the 
durable constitutional order begun by Portales and Bulnes. By 
reducing church prerogatives, Montt eased the transition from a 
sequence of Conservative chief executives to a series of Liberals. 
As a civilian head of state, he was less harsh with his Liberal ad- 
versaries. He also promoted conciliation by including many north- 
erners as well as southerners in the government. 

Benefiting from the sharp growth in exports and customs reve- 
nues in the 1850s, Montt demonstrated the efficacy of the central 
government by supporting the establishment of railroads, a telegraph 
system, and banks. He created the first government-run railroad 
company in South America, despite his belief in laissez-faire. He 
also initiated the extension of government credit to propertied 
groups. Under President Montt, school construction accelerated, 
laying the groundwork for Chile to become one of the most liter- 
ate nations in the hemisphere. Expanding on the initiative started 
by Bulnes, Montt also pushed back the southern frontier, in part 
by encouraging German immigration. 

As the next presidential succession approached, a second rebel- 
lion ensued in 1859. The rebels represented a diverse alliance, in- 
cluding Liberals who opposed the right-wing government and its 
encroachments on civil liberties, Conservatives who believed the 
president was insufficiently proclerical, politicians who feared the 
selection of a strongman as Montt's successor, and regionalists who 
chafed at the concentration of power in Santiago. Once again, 
Montt prevailed in a test of arms, but thereafter he conciliated his 
opponents by nominating a successor acceptable to all sides, Jose 
Joaquin Perez Mascayano (president, 1861-71). 

Under Bulnes and Montt, economic elites had resisted paying 
direct taxes, so the national government had become heavily de- 
pendent on customs duties, particularly on mineral exports. Im- 
ports were also taxed at a low level. The most important exports 
in the early years of independence had been silver and copper, 
mined mainly in the northern provinces, along with wheat, tal- 
low, and other farm produce. The Chilean elites eagerly welcomed 
European and North American ships and merchants. Although 
these elites debated the issue of protectionism, they settled on low 
tariffs for revenue. Despite some dissent and deviations, the 



21 



Chile: A Country Study 



dominant policy in the nineteenth century was free trade — the ex- 
change of raw materials for manufactured items — although a few 
local industries took root. Britain quickly became Chile's primary 
trading partner. The British also invested, both directly and in- 
directly, in the Chilean economy. 

The Liberal Era, 1861-91 

Following Perez's peaceful ten-year administration, Chilean 
presidents were prohibited from running for election to a second 
consecutive term by an 1871 amendment to the constitution. Perez 
was succeeded as president by Federico Errazuriz Zafiartu (187 1 — 
76), Anibal Pinto Garmendia (1876-81), and Domingo Santa Maria 
Gonzalez (1881-86), the latter two serving during the War of the 
Pacific (1879-83). All formed coalition governments in which the 
president juggled a complicated array of party components. 

The Liberal Party (Partido Liberal), the Conservative Party (Par- 
tido Conservador), and the National Party (Partido Nacional) 
were formed in 1857. Once the Liberal Party replaced the Con- 
servative Party as the dominant party, the Liberal Party was in 
turn challenged from the left by the more fervent reformists of the 
Radical Party (Partido Radical). A spin-off from the Liberal Party, 
the Radical Party was founded in 1861 . Reformists of the Democrat- 
ic Party (Partido Democratico), which in turn splintered from the 
Radical Party in 1887, also challenged the Liberal Party. The Na- 
tional Party also vied with the Conservatives and Liberals to 
represent upper-class interests. Derived from the Montt presidency, 
the National Party, which represented the elite and the landed 
aristocracy, took a less proclerical, more centrist position than that 
of the Conservatives. Party competition escalated after the elec- 
toral reform of 1874 extended the franchise to all literate adult males, 
effectively removing property qualifications. 

Like Montt, most Liberal chief executives were centrists who 
introduced change gradually. Their administrations continued to 
make incremental cuts in church privileges but tried not to inflame 
that issue. Secularization gradually gained ground in education, 
and Santa Maria transferred from the church to the state the 
management of birth, marriage, and death records. 

Even during internal and external conflicts, Chile continued to 
prosper. When Spain attempted to reconquer Peru, Chile engaged 
in a coastal war (1864-66) with the Spaniards, whose warships 
shelled Valparaiso. Once again, Chile asserted its sway over the 
west coast of South America. Farming, mining, and commerce grew 
steadily until the world depression of the 1870s, when Chile again 
turned to a war against its Andean neighbors. 



22 



Historical Setting 



War of the Pacific, 1879-83 

Chile's borders were a matter of contention throughout the 
nineteenth century. The War of the Pacific began on the heels of 
an international economic recession that focused attention on 
resources in outlying zones. Under an 1866 treaty, Chile and Bolivia 
divided the disputed area encompassing the Atacama Desert at 24° 
south latitude (located just south of the port of Antofagasta) in the 
understanding that the nationals of both nations could freely ex- 
ploit mineral deposits in the region. Both nations, however, would 
share equally all the revenue generated by mining activities in the 
region. But Bolivia soon repudiated the treaty, and its subsequent 
levying of taxes on a Chilean company operating in the area led 
to an arms race between Chile and its northern neighbors of Bolivia 
and Peru. 

Fighting broke out when Chilean entrepreneurs and mine-owners 
in present-day Tarapaca Region and Antofagasta Region, then be- 
longing to Peru and Bolivia, respectively, resisted new taxes, the 
formation of monopoly companies, and other impositions. In those 
provinces, most of the deposits of nitrate — a valuable ingredient 
in fertilizers and explosives — were owned and mined by Chileans 
and Europeans, in particular the British. Chile wanted not only 
to acquire the nitrate fields but also to weaken Peru and Bolivia 
in order to strengthen its own strategic preeminence on the Pacific 
Coast. Hostilities were exacerbated because of disagreements over 
boundary lines, which in the desert had always been vague. Chile 
and Bolivia accused each other of violating the 1866 treaty. 
Although Chile expanded northward as a result of the War of the 
Pacific, its rights to the conquered territory continued to be ques- 
tioned by Peru, and especially by Bolivia, throughout the twen- 
tieth century. 

War began when Chilean troops crossed the northern frontier 
in 1879. Although a mutual defense pact had allied Peru and Bolivia 
since 1873, Chile's more professional, less politicized military over- 
whelmed the two weaker countries on land and sea. The turning 
point of the war was the occupation of Lima on January 17, 1881, 
a humiliation the Peruvians never forgave (see War of the Pacific, 
1879-83, ch. 5). Chile sealed its victory with the 1883 Treaty of 
Ancon, which also ended the Chilean occupation of Lima. 

As a result of the war and the Treaty of Ancon, Chile acquired 
two northern provinces — Tarapaca from Peru and Antofagasta from 
Bolivia. These territories encompassed most of the Atacama Desert 
and blocked off Bolivia's outlet to the Pacific Ocean (see fig. 3). 
The war gave Chile control over nitrate exports, which would 



23 



Chile: A Country Study 



V. Boundary representation 
. r 1 not necessarily authoritative 



BOLIVIA 




Present-day international 

boundary 
Disputed area boundary 

Present-day department or 
province capital 

Populated place 

Peruvian territory administered 
by Chile, 1883-1929; 
awarded to Peru by Chile, 1929 

Peruvian territory administered 
by Chile, 1883-1929; 
awarded to Chile by Peru, 1929 

Awarded to Chile by 
Peru, 1883 



Awarded to Chile by 
Bolivia, 1883 



Awarded to Chile by 
Bolivia, 1874 

100 Kilometers 




(Pacific 
Ocean 



Tocopiita L 

CobijaU 

Punta j 
Angamos / 

f Mejillones 
Antofagasta 



ANTOFAGASTA 



Paposoj^ _ 




3-^ 



ARGENTINA 



Source: Based on information from David P. Werlich, Peru: A Short History, Carbondale, Illinois, 1978, 
110-11. 

Figure 3. Territorial Adjustments among Bolivia, Chile, and Peru, 1874- 
1929 



24 



Historical Setting 



dominate the national economy until the 1920s, possession of cop- 
per deposits that would eclipse nitrate exports by the 1930s, great- 
power status along the entire Pacific Coast of South America, and 
an enduring symbol of patriotic pride in the person of naval hero 
Arturo Prat Chacon. The War of the Pacific also bestowed on 
Chile's armed forces enhanced respect, the prospect of steadily in- 
creasing force levels, and a long-term external mission guarding 
the borders with Peru, Bolivia, and Argentina. In 1885 a German 
military officer, Emil Korner, was contracted to upgrade and profes- 
sionalize the armed forces along Prussian lines. In subsequent years, 
better education produced not only a more modern officer corps 
but also a military leadership capable of questioning civilian 
management of national development (see Development of the 
Armed Forces, ch. 5). 

After batding the Peruvians and Bolivians in the north, the mili- 
tary turned to engaging the Araucanians in the south. The final 
defeat of the Mapuche in 1882 opened up the southern third of 
the national territory to wealthy Chileans who quickly carved out 
immense estates. No homestead act or legion of family farmers stood 
in their way, although a few middle-class and immigrant agricul- 
turalists moved in. Some Mapuche fled over the border to Argen- 
tina, The army herded those who remained onto tribal reservations 
in 1884, where they would remain mired in poverty for genera- 
tions. Like the far north, these southern provinces would become 
stalwarts of national reform movements, critical of the excessive 
concentration of power and wealth in and around Santiago. 

Soon controlled by British and then by United States investors, 
the nitrate fields became a classic monocultural boom and bust. 
The boom lasted four decades. Export taxes on nitrates often fur- 
nished over 50 percent of all state revenues, relieving the upper 
class of tax burdens. The income of the Chilean treasury nearly 
quadrupled in the decade after the war. The government used the 
funds to expand education and transportation. The mining bonanza 
generated demand for agricultural goods from the center and south 
and even for locally manufactured items, spawning a new plutocra- 
cy. Even more notable was the emergence of a class-conscious, na- 
tionalistic, ideological labor movement in the northern mining 
camps and elsewhere. 

Prosperity also attracted settlers from abroad. Although small 
in number compared with those arriving in Argentina, European 
immigrants became an important element of the new middle class; 
their numbers included several future manufacturing tycoons. These 
arrivals came from both northern and southern Europe. People 
also emigrated from the Middle East, Peru, and Bolivia. Although 



25 



Chile: A Country Study 

most immigrants ended up in the cities of Chile, a minority suc- 
ceeded at farming, especially in the south. In the early twentieth 
century, a few members of the Chilean elite tried to blame the rise 
of leftist unions and parties on foreign agitators, but the charge 
rang hollow in a country where less than 5 percent of the popula- 
tion had been born abroad. 

Downfall of a President, 1886-91 

The controversial downfall of President Jose Manuel Balmaceda 
Fernandez (1886-91) represented the only occasion when power 
was transferred by force between 1830 and 1924. This event resulted 
in the most important alteration in the constitutional system be- 
tween 1833 and 1925. In many respects, the Balmaceda episode 
was the culmination of two trends: the growing strength of Con- 
gress in relation to the president, and the expanding influence of 
foreign capital in the mining zone. In essence, the rebels opposed 
Balmaceda' s plans to expand the role of the executive branch in 
the political and economic systems. 

Although scholars have debated whether the uprising against 
Balmaceda was mainly a fight over political or economic privileges, 
the bulk of research has supported the primacy of political over 
economic issues. From the 1830s to the 1880s, Congress had gradu- 
ally asserted more and more authority over the budget and over 
cabinet ministers. Balmaceda tried to circumvent that budgetary 
power and break the hold of congressmen and local bosses on con- 
gressional elections. 

Complaining about the heavy-handed rule of the president, and 
in particular his interference in congressional elections, Congress 
led a revolt against Balmaceda in 1891. Conservatives generally 
supported the rebels; Liberals and Democrats backed the presi- 
dent. Along with some renegade Liberals, the newly emergent Radi- 
cal Party aligned with the so-called congressionalists, not wishing 
to see legislative prerogatives curtailed just as the party was gain- 
ing clients and strength. Those provincials resentful of the grow- 
ing centralization of political and economic power in and around 
Santiago also backed the rebellion, especially in the north. Initially, 
the navy, the armed service that included the highest percent- 
age of aristocrats, sided with the rebels; the army sided with the 
president. 

The rebellion also attracted British entrepreneurs worried by 
Balmaceda' s threat to encroach on the independence and revenues 
of the foreign-owned nitrate mines. Although not opposed to foreign 
investment, Balmaceda had proposed a greater role for the state 
and higher taxes in the mining sector. Tension mounted because 



26 



Historical Setting 



nitrate sales were in a slump, a recurring problem because of the 
volatility of that commodity's price on international markets. The 
most famous British mine owner was John North, the "nitrate 
king, ' ' who was angry that his nitrate railroad monopoly had been 
terminated by Balmaceda. Although not directly involved, the 
United States supported Balmaceda as the legal president. 

The insurgents won the bloody but brief Civil War of 1891 when 
the army decided not to fight the navy. As a result of the rebel 
victory, Congress became dominant over the chief executive and 
the nitrate mines increasingly fell into British and North Ameri- 
can hands. Having gained asylum in the Argentine embassy, 
Balmaceda waited until the end of his legal presidential term and 
then committed suicide. As Portales became a legendary hero to 
the right, so Balmaceda was later anointed by the left as an eco- 
nomic nationalist who sacrificed his life in the struggle for Chilean 
liberation. 

Already tense as a result of the civil war over Balmaceda, United 
States-Chilean relations deteriorated further as a result of the Balti- 
more incident. In late 1891 , sailors from the U.S.S. Baltimore brawled 
with Chileans during shore leave in Valparaiso. To avert a war with 
an angry United States, the Chilean government apologized and 
paid reparations. 

Parliamentary Republic, 1891-1925 

The so-called Parliamentary Republic was not a true parliamen- 
tary system, in which the chief executive is elected by the legisla- 
ture. It was, however, an unusual regime in presidentialist Latin 
America, for Congress really did overshadow the rather ceremonial 
office of the president and exerted authority over the chief execu- 
tive's cabinet appointees. In turn, Congress was dominated by the 
landed elites. This was the heyday of classic political and economic 
liberalism. 

For many decades thereafter, historians derided the Parliamen- 
tary Republic as a quarrel-prone system that merely distributed 
spoils and clung to its laissez-faire policy while national problems 
mounted. The characterization is epitomized by an observation 
made by President Ramon Barros Luco (1910-15), reputedly made 
in reference to labor unrest: "There are only two kinds of problems: 
those that solve themselves and those that can't be solved." At the 
mercy of Congress, cabinets came and went frequently, although 
there was more stability and continuity in public administration 
than some historians have suggested. 

Political authority ran from local electoral bosses in the provinces 
through the congressional and executive branches, which reciprocated 



27 



Chile: A Country Study 

with payoffs from taxes on nitrate sales. Congressmen often won 
election by bribing voters in this clientelistic and corrupt system. 
Many politicians relied on intimidated or loyal peasant voters in 
the countryside, even though the population was becoming increas- 
ingly urban. 

The lackluster presidents and ineffectual administrations of the 
period did little to respond to the country's dependence on vola- 
tile nitrate exports, spiraling inflation, and massive urbanization. 
They also ignored what was called "the social question." This eu- 
phemism referred mainly to the rise of the labor movement and 
its demands for better treatment of the working class. Critics com- 
plained that the upper class, which had given Chile such dynamic 
leadership previously, had grown smug and lethargic, thanks to 
the windfall of nitrate wealth. 

In recent years, however, particularly when the authoritarian 
regime of Augusto Pinochet is taken into consideration, some schol- 
ars have reevaluated the Parliamentary Republic of 1891-1925. 
Without denying its shortcomings, they have lauded its democrat- 
ic stability. They have also hailed its control of the armed forces, 
its respect for civil liberties, its expansion of suffrage and partici- 
pation, and its gradual admission of new contenders, especially 
reformers, to the political arena. 

In particular, two young parties grew in importance — the 
Democratic Party, with roots among artisans and urban workers, 
and the Radical Party, representing urban middle sectors and 
provincial elites. By the early twentieth century, both parties were 
winning increasing numbers of seats in Congress. The more leftist 
members of the Democratic Party became involved in the leader- 
ship of labor unions and broke off to launch the Socialist Workers' 
Party (Partido Obrero Socialista — POS) in 1912. The founder of 
the POS and its best-known leader, Luis Emilio Recabarren Ser- 
rano, also founded the Communist Party of Chile (Partido Com- 
munista de Chile— PCCh), in 1922. 

Urbanization 

Beginning in the middle of the nineteenth century, Chile's cit- 
ies grew rapidly. They absorbed a trickle of immigrants from abroad 
and then vast numbers of migrants from the Chilean countryside. 
Improved transportation and communications in the second half 
of the nineteenth century facilitated these population movements. 
Although Santiago led the way, smaller cities such as Valparaiso 
and Concepcion also swelled in size. 

The founding of the Industrial Development Association (So- 
ciedad de Fomento Fabril — Sofofa) in 1883 was another indication 



28 



A weaver in 
Donihue 
in central Chile 
Courtesy Embassy of 
Chile, Washington 




of urbanization. It promoted industrialization long before the in- 
tense efforts of the 1930s to the 1960s. Manufacturing grew in im- 
portance in the latter decades of the nineteenth century and the 
opening decades of the twentieth. Most industry remained small- 
scale, with most of the labor performed by artisans. Protected 
industrialization did not become the vanguard of economic develop- 
ment until the period between the world wars. 

The urban middle class also grew in size and became more politi- 
cally assertive by the turn of the century. Whereas the economy 
and the society became more urban and diversified, the political 
system lagged behind, remaining mainly in the hands of the up- 
per class. Nevertheless, more members of the middle class began 
appearing in party leadership positions, especially among the Dem- 
ocrats and Radicals. They were also prominent in the Chilean Stu- 
dent Federation (Federacion de Estudiantes de Chile — FECh), 
based at the University of Chile. Equally important was their 
presence among the top commanders in the armed forces, who in- 
creasingly identified primarily with middle-class interests. 

In the closing years of the nineteenth century, labor organiza- 
tions gathered force, first as mutual aid societies and then increas- 
ingly as trade unions. In the opening decades of the twentieth 
century, labor organizing, unrest, and strikes reached new levels 
of intensity. In the northern nitrate and copper mines, as well as 
in the ports and cities, workers came together to press demands 



29 



Chile: A Country Study 

for better wages and working conditions. Attracted strongly to anar- 
chist, anarcho-syndicalist, and socialist ideologies, they were harshly 
repressed during the Parliamentary Republic. The government car- 
ried out several massacres of miners in the nitrate camps; the most 
notorious took place in Iquique in 1907. Thus, a pattern of vio- 
lent clashes between soldiers and workers took shape. 

Organizational efforts in the mines and cities culminated in the 
creation of the first national labor confederation, the Workers' Fed- 
eration of Chile (Federacion Obrera de Chile — FOCh), in 1909. 
The organization became more radical as it grew and affiliated with 
the PCCh in 1922, under the leadership of Recabarren. Its greatest 
strength was among miners, whereas urban workers were more 
attracted to independent socialism or to anarcho-syndicalism. The 
latter movement grew out of resistance societies and evolved into 
the Industrial Workers of the World (IWW). Unlike the FOCh, 
the IWW spurned ties with political parties. 

The emergence of working-class demands and movements 
spawned the so-called social question. Intellectuals and writers began 
criticizing the ruling class and the Parliamentary Republic for their 
neglect of workers and of social ills. New census data and other 
studies at the beginning of the twentieth century shocked the proud 
Chilean elite with revelations about the extent of poverty, illiteracy, 
and poor health among the vast majority of the population. Espe- 
cially alarming were infant mortality figures that far exceeded those 
of Western Europe. Realization of the squalor and anger of the 
working class inspired new reform efforts. 

Arturo Alessandri's Reformist Presidency, 1920-25 

President Arturo Aiessandri Palma (1920-24, March-October 
1925, 1932-38) appealed to those who believed the social question 
should be addressed, to those worried by the decline in nitrate ex- 
ports during World War I, and to those weary of presidents domi- 
nated by Congress. Promising "evolution to avoid revolution," 
he pioneered a new campaign style of appealing directiy to the mass- 
es with florid oratory and charisma. After winning a seat in the 
Senate representing the mining north in 1915, he earned the sobri- 
quet "Lion of Tarapaca." As a dissident Liberal running for the 
presidency, Aiessandri attracted support from the more reformist 
Radicals and Democrats and formed the so-called Liberal Alliance. 
He received strong backing from the middle and working classes 
as well as from the provincial elites. Students and intellectuals also 
rallied to his banner. At the same time, he reassured the land- 
owners that social reforms would be limited to the cities. 



30 



Historical Setting 



Alessandri also spoke to discontent stemming from World War 
I. Although Chile had been neutral, the war had disrupted the in- 
ternational commerce that drove the economy. German develop- 
ment of artificial nitrates was especially damaging, and thereafter 
copper would gradually surpass nitrates as the leading export, taking 
over conclusively in the 1930s. Inflation and currency deprecia- 
tion compounded the country's economic woes. 

During and after the war, the United States displaced Britain 
as Chile's most important external economic partner, first in trade 
and then in investments. American companies, led by Kennecott 
and Braden, took control of the production of copper and nitrates. 
As corporate investors, bankers, salesmen, advisers, and even en- 
tertainers, such as actor and humorist Will Rogers, came to Chile, 
a few Chileans began to worry about the extent of United States 
penetration. 

As the candidate of the Liberal Alliance coalition, Alessandri 
barely won the presidency in 1920 in what was dubbed "the revolt 
of the electorate." Chilean historians consider the 1920 vote a 
benchmark or watershed election, along with the contests of 1938, 
1970, and 1988. Like other reformers elected president in the twen- 
tieth century — Pedro Aguirre Cerda (1938-41), Gabriel Gonzalez 
Videla (1946-52), and Salvador Allende Gossens (1970-73) — 
Alessandri had to navigate skillfully through treacherous waters 
from the day he was elected until his inauguration, warding off 
attempts to deny him the fruits of victory. Mass street demonstra- 
tions by his middle- and working-class supporters convinced the 
conservative political elite in Congress to ratify his narrow win. 

After donning the presidential sash, Alessandri discovered that 
his efforts to lead would be blocked by the conservative Congress. 
Like Balmaceda, he infuriated the legislators by going over their 
heads to appeal to the voters in the congressional elections of 1924. 
His reform legislation was finally rammed through Congress un- 
der pressure from younger military officers, who were sick of the 
neglect of the armed forces, political infighting, social unrest, and 
galloping inflation. 

In a double coup, first military right-wingers opposing Alessan- 
dri seized power in September 1924, and then reformers in favor 
of the ousted president took charge in January 1925. The latter 
group was led by two colonels, Carlos Ibanez del Campo and Mar- 
maduke Grove Vallejo. They returned Alessandri to the presidency 
that March and enacted his promised reforms by decree. Many 
of these reforms were encapsulated in the new constitution of 1925, 
which was ratified in a plebiscite. 



31 



Chile: A Country Study 

Military Interventions, 1925-32 

As in 1891 and 1973, the military intervened in national poli- 
tics in the 1920s partly because of economic distress, partly to break 
a stalemate between the legislative and executive branches, and, 
above all, to change the political system. Colonel Ibanez (presi- 
dent, 1927-31, 1952-58), quickly promoted to general, became the 
dominant power. He ruled, either behind or on the seat of power, 
until the economic crisis caused by the Great Depression (see Glos- 
sary) in 1931 prompted his resignation. 

The 1925 Constitution 

The 1925 constitution was the second major charter in Chilean 
history, lasting until 1973. It codified significant changes, includ- 
ing the official separation of church and state, thus culminating 
a century of gradual erosion of the political and economic power 
of the Roman Catholic Church. The constitution also provided legal 
recognition of workers' right to organize, a promise to care for the 
social welfare of all citizens, an assertion of the right of the state 
to infringe on private property for the public good, and increased 
powers for the now directly elected president in relation to the bi- 
cameral Congress, in particular concerning the removal of cabi- 
net ministers, who heretofore had often been removed at the whim 
of the legislature. 

Presidential and congressional elections were staggered so that 
a chief executive could not bring a legislature in on his coattails. 
The new constitution extended presidential terms from five to six 
years, with immediate reelection prohibited. It established a sys- 
tem of proportional representation for parties putting candidates 
up for Congress. The government was divided into four branches, 
in descending order of power: the president, the legislature, the 
judiciary, and the comptroller general, the latter authorized to judge 
the constitutionality of all laws requiring fiscal expenditures. 

The Office of the Comptroller General of the Republic (Oficina 
de la Contraloria General de la Republica) was designed by a United 
States economic adviser, Edwin Walter Kemmerer. In 1925 he also 
created the Central Bank of Chile (see Glossary) and the position 
of superintendent of banks, while putting the country on the gold 
standard. His reforms helped attract massive foreign investments 
from the United States, especially loans to the government. 

Although a labor code was not finalized until 1931 , several labor 
and social security laws enacted in 1924 would govern industrial 
relations from the 1930s to the 1970s. The legislation legalized un- 
ions and strikes but imposed government controls over unions. 



32 



Historical Setting 



Union finances and elections were subjected to government inspec- 
tion. The laws also restricted union activities and disallowed na- 
tional confederations, which therefore subsequently arose outside 
the legal framework. Only factories with at least twenty-five work- 
ers could have an industrial union, even though approximately two- 
thirds of the industrial enterprises employed four or fewer workers, 
in effect artisans. Workers in smaller shops could form professional 
unions with workers of the same skill employed nearby. Agricul- 
tural unions remained virtually outlawed or extremely difficult to 
organize until the 1960s. The code left unions disadvantaged in 
their bargaining with employers and therefore reliant on political 
parties as allies. Those allies were crucial because the new code 
made the state the mediator in labor-management disputes. 

Carlos Ibafiez's First Presidency, 1927-31 

After a weak successor served in the wake of Alessandri's resig- 
nation in 1925, Ibafiez made himself president in a rigged election 
in 1927. He based his reign on military support (especially from 
the army), on repression (especially of labor unions, leftists, and 
political parties), and on a flood of loans from private lenders (es- 
pecially from New York). He also created the national police, known 
as the Carabineros. His expansion of the central government found 
favor with the middle class. While Ibafiez promoted industry and 
public works, the economy fared well until torpedoed by the Great 
Depression. 

According to the League of Nations (see Glossary), no other na- 
tion's trade suffered more than Chile's from the economic collapse. 
Unemployment approached 300,000, almost 25 percent of the work 
force. As government revenues plummeted, deficits grew. Chile 
suspended payments on its foreign debt in 1931 and took its 
currency off the gold standard in 1932. Expansion of the money 
supply and increased government spending thereafter generated 
inflation and rapid recovery. Also helpful was an emphasis on 
import- substitution industrialization (see Glossary) and the revival 
of exports, especially copper. 

Rather than run the risk of civil war, Ibafiez went into exile in 
Argentina in July 1931 to avert clashes with demonstrators pro- 
testing his orthodox economic response to the depression and gener- 
ally oppressive rule. His regime was followed by a kaleidoscope 
of governments, made and unmade through elections and military 
coups. The most notable short-lived administration was the twelve- 
day Socialist Republic of 1932, led by an air force commander, 
Marmaduke Grove, who would establish the Socialist Party (Partido 
Socialista) in 1933. Exasperated by depression and instability, 



33 



Chile: A Country Study 



Chileans finally restored civilian rule by reelecting Alessandri to 
the presidency in 1932. Although the depression capsized civilian 
governments in most of Latin America, it discredited military rule 
in Chile. Now the 1925 constitution took full effect; it would remain 
in force until the overthrow of Salvador Allende Gossens in 1973. 

Mass Democracy, 1932-73 

From 1932 to 1973, Chile was the only country in Latin America 
to sustain electoral democracy at a time when major Marxist par- 
ties led the workers. Its stable multiparty political system bore more 
resemblance to West European than to Latin American models. 
Chileans took great pride in their representative democracy, and 
many looked with contempt on their more tumultuous neighbors. 

Out of the turmoil of the depression, new political forces arose 
that shifted the political spectrum to the left. The Conservatives 
and the Liberals grew closer together as the combined forces on 
the right, now more fearful of socialism than of their traditional 
enemies in the anticlerical camp. The Radicals replaced the Liberals 
as the swing party in the center, now that they were outflanked 
on the left by the growing PCCh and the Socialist Party. A small 
group of Catholics known as the Falange broke away from the Con- 
servative Party in 1938 to form a new party, the National Falange 
(Falange Nacional). It offered a non-Marxist, centrist vision of dra- 
matic reform, a vision that would take wing in the 1950s under 
the name of Christian Democracy. 

Alessandria Second Presidency, 1932-38 

Under the steady hand of the veteran Alessandri, reelected in 
December 1932 with 55 percent of the vote, Chile rapidly rein- 
stated its interrupted democracy and revived its shattered economy. 
Although still a centrist reformer at heart, Alessandri now became 
the paladin of the right because the new Socialist left had outflanked 
him. He put into practice both the 1925 constitution and the 1931 
labor code; reshuffled military commands; supported a 50,000- 
member civilian paramilitary force, the Republican Militia (Milicia 
Republicana), during 1932-36 to keep the armed forces in the bar- 
racks and to threaten leftists; and cut unemployment by promot- 
ing industry and public works. 

In accordance with long-standing Chilean foreign policy princi- 
ples, Alessandri sought to avoid entanglement in European con- 
flicts. He cultivated good relations with both Britain and Germany, 
while remaining friendly with the United States. He declared neu- 
trality in the Spanish Civil War, as the Chilean government had 
done during World War I. 



34 



Historical Setting 



The Socialists, Communists, and Radicals denounced Alessan- 
dri for insufficient economic nationalism and inadequate attention 
to the needs of working people. Heeding the new policy of the 
Comintern (see Glossary), adopted in 1935, the Chilean Com- 
munists backed away from proletarian revolution, which they had 
advocated obediendy from 1928 to 1934. Now they promoted broad, 
reformist electoral coalitions in the name of antifascism. With slight 
deviations and name changes, the PCCh sustained this accommoda- 
tive approach from 1935 until 1980. 

Prodded by the Communists, the Radicals and Socialists aligned 
in 1936 with the Confederation of Chilean Workers (Confedera- 
tion de Trabajadores de Chile — CTCh), a by-product of union 
growth and solidarity, to forge the Popular Front (Frente Popu- 
lar). The Popular Front was given impetus by Alessandri's crush- 
ing of a railroad strike that year. The coalition also included the 
old Democrat Party, which was gradually supplanted by the So- 
cialist Party until the former disappeared in the early 1940s. Simi- 
lar to multiparty alliances in Europe and to populist coalitions in 
Latin America, the Popular Front galvanized the middle and work- 
ing classes on behalf of democracy, social welfare, and industriali- 
zation. Its redistributive, populist slogan was "Bread, Roof, and 
Overcoat," coined by the 1932 Socialist Republic. 

The Popular Front barely beat Alessandri's would-be rightist 
successor in the presidential contest of 1938 with 50.3 percent of 
the vote. One key to the Popular Front's victory was its nomina- 
tion of a mild-mannered Radical, Pedro Aguirre Cerda, rather than 
the inflammatory Socialist, Marmaduke Grove. The other key was 
a bizarre sequence of events in which a group of Chilean fascists 
(members of the National Socialist Movement), backing Ibafiez's 
independent bid for the presidency, staged an unsuccessful putsch 
on the eve of the election. The slaughter of the putschists by forces 
of the Alessandri government prompted the fascists to throw their 
votes to the Popular Front. Although not numerous, those ballots 
put the Popular Front over the top. 

The incongruous alignment of Nazis behind the antifascist Popu- 
lar Front showed how far Chilean politicians would go to subor- 
dinate ideology to electoral considerations. Thus, a coalition that 
included Socialists and Communists captured the presidency quite 
early in twentieth-century Chile. Future president Salvador Allende 
served briefly as minister of health in this period. 

Running under the slogan "To Govern Is to Educate," Aguirre 
Cerda (president, 1938-41) won an electoral majority in 1938. 
However, less than 5 percent of the national population actually 
voted for him. Until the rapid expansion of the electorate in the 



35 



Chile: A Country Study 



1950s, less than 10 percent of the national population voted for 
presidential candidates. Only literate males over the age of twenty- 
one could vote in most elections until the 1950s; of those eligible 
to vote, approximately 50 percent usually registered, and the vast 
majority of those registered cast ballots. Women were allowed to 
exercise the franchise in installments, first for municipal elections 
in 1935, then for congressional contests in 1951, and finally for 
presidential races in 1952. 

As had been the case with other Chilean electoral victories by 
left-wing candidates, tense days passed between the counting of 
the ballots and the ratification of the results by Congress. Oppo- 
nents of the left schemed to prevent the takeover by their nemeses 
or to extract concessions before accepting defeat. Aguirre Cerda 
assured rightists of his moderate intentions, and the Alessandri 
government presided over his peaceful inauguration. The military 
quashed a single coup attempt in 1939. 

Popular Front Rule, 1938-41 

Led by the centrist Radical Party, the administration of the Popu- 
lar Front assimilated the Socialists and Communists into the es- 
tablished bargaining system, making potentially revolutionary forces 
into relatively moderate participants in legal institutions. Although 
the official Popular Front ended in 1941, that bargaining system, 
with Marxist parties usually backing reformist Radical presidents, 
lasted until 1952. 

Aguirre Cerda, like all Chilean presidents in the 1930s and 1940s, 
essentially pursued a model of state capitalism in which govern- 
ment collaborated with private enterprise in the construction of a 
mixed economy. The Popular Front promoted simultaneous import- 
substitution industrialization and welfare measures for the urban 
middle and working classes. As in the rest of Latin America, the 
Great Depression and then the onset of World War II accelerated 
domestic production of manufactured consumer items, widened 
the role of the state, and augmented dependence on the United 
States. All these trends dissuaded Marxists from demanding bold 
redistributive measures at the expense of domestic and foreign 
capitalists. 

Aiming to catch up with the more affluent West, Chile's Popu- 
lar Front mobilized the labor movement behind national industri- 
al development more than working-class social advances. Although 
workers received few material benefits from the Popular Front, the 
number of legal unions more than quadrupled from the early 1930s 
to the early 1940s. Still, unions represented only about 10 percent 
of the work force. 



36 



Historical Setting 



Prior to his illness and death in November 1941, President 
Aguirre Cerda labored to hold his coalition together, to overcome 
the implacable opposition of the right-wing parties, and to fulfill 
his promises of industrialization and urban social reform. The So- 
cialists and Communists quarreled incessantly, especially over the 
PCCh's support of the 1939 German-Soviet Nonaggression Pact 
between Hitler and Stalin. Early in 1941 , the Socialist Party with- 
drew from the Popular Front coalition because of its animosity 
toward the PCCh, its rival claimant to worker loyalty and Marxist 
inspiration. Because the Conservatives and Liberals blocked nearly 
all legislation in Congress, little social reform was accomplished, 
except for improvements in housing and education. To appease 
right-wingers, the president clamped down on rural unionization. 

From the 1920s into the 1960s, this modus vivendi between ur- 
ban reformers and rural conservatives held fast. Progressives car- 
ried out reforms in the cities for the middle and working classes, 
while denying peasants union rights. Thus were preserved the avail- 
ability of low-cost foodstuffs for urban consumers, control of the 
countryside for latifundistas (large landowners), and domination of 
the rural vote by right-wing politicians. From time to time, Marxist 
organizers threatened to mobilize the rural work force, and time 
and again they were restrained by their centrist political allies, who 
needed to reassure the economic and political right-wingers. When 
peasants protested this exploitation, they were repressed by land- 
owners or government troops. 

The greatest achievement of the Popular Front was the creation 
in 1939 of the state Production Development Corporation (Cor- 
poracion de Fomento de la Produccion — Corfo) to supply credit 
to new enterprises, especially in manufacturing. Partly with loans 
from the United States Export-Import Bank, Corfo contributed 
greatiy to import- substitution industrialization, mainly for consumer 
items. The economically active population working in industry grew 
from 15 percent in 1930 to 20 percent in 1952, where it hovered 
for two decades. From the end of the 1930s to the start of the 1950s, 
Corfo supplied almost one-fourth of total domestic investments. 

Juan Antonio Rfos's Presidency, 1942-46 

A Radical even more conservative than Aguirre Cerda, Juan 
Antonio Rios Morales (president, 1942-46), won the 1942 presiden- 
tial election with 56 percent of the vote. Although the formal Popular 
Front had been terminated, the Socialists and Communists still gave 
their votes to Rios to avoid a return of Ibanez as the candidate 
of the Conservatives and Liberals. Under the stringencies of war- 
time, the new president further soft-pedaled social reform and 



37 



Chile: A Country Study 

emphasized industrial growth, under the slogan, "To Govern Is 
to Produce." Although he made some improvements in housing 
and health care, Rios concentrated on promoting urban enterprises. 

Rios continued his predecessor's policy of neutrality in World 
War II. Although sympathetic to the Allies, many Chileans wor- 
ried about the vulnerability of their Pacific Coast. Because of a 
desire for closer economic and security ties with the United States, 
Rios finally bowed to pressure from Socialists, Communists, and 
other staunch antifascists, severing relations with the Axis in Janu- 
ary 1943. 

Even after breaking relations, Chile was never satisfied with the 
amount of aid and Lend- Lease military equipment it received from 
the United States. The United States, in turn, was equally discon- 
tent with languid Chilean action against Axis agents and firms. 
Nevertheless, Chile subsidized the Allied cause by accepting an 
artificially low price for its copper exports to the United States while 
paying increasingly higher prices for its imports. The war boosted 
Chile's mineral exports and foreign-exchange accumulation. At the 
same time, United States trade, credits, and advisers facilitated 
state support for new enterprises, including steel, oil, and fishing. 

Not unlike Ibanez in the 1920s, Rios hoped to develop the na- 
tional economy through external alignment with the "Colossus of 
the North." After displacing Britain as Chile's most important eco- 
nomic partner in the 1920s, the United States faced a period of 
German competition in the 1930s and then reasserted its econom- 
ic dominance in the 1940s. That economic domination would last 
until the 1980s. 

As Rios's health deteriorated in 1945, another Radical, Alfredo 
Duhalde Vasquez (president, June- August 1946), took over as in- 
terim chief executive. Reacting against Rios's conservatism and 
Duhalde 's antilabor policies, progressive factions of the Radical 
Party joined with the Communists to field a left-wing Radical, 
Gabriel Gonzalez Videla, for president in the 1946 election. Gon- 
zalez Videla also received the backing of most Socialists. 

Trying to revive the reformist spirit of 1938, Gonzalez Videla 
eked out a plurality of 40 percent against a field of rightist con- 
tenders. Once again, the candidate of the left had to walk a tight- 
rope from election to inauguration because Congress had the right 
to pick either of the two front-runners when no one polled an ab- 
solute majority. Gonzalez Videla ensured his congressional approval 
by granting landowners new legal restrictions on peasant unioni- 
zation, restrictions that lasted from 1947 until 1967. He also ap- 
peased the right by including Liberals in his cabinet along with 
Radicals and Communists, the most exotic ministerial concoction 



38 



Historical Setting 



Chileans had ever seen, again demonstrating the politician's abil- 
ity to cut deals transcending ideology. 

Gabriel Gonzalez Videla's Presidency, 1946-52 

Chile quickly became enmeshed in the Cold War, as Moscow 
and especially Washington meddled in its affairs. That friction 
resulted in the splitting of the CTCh in 1946 into Communist and 
Socialist branches and then the outlawing of the PCCh. The So- 
cialists were now opposed to the Communists and aligned with the 
American Federation of Labor-Congress of Industrial Organiza- 
tions (AFL-CIO), having grown closer to United States labor in- 
terests during World War II. 

Once in office, Gonzalez Videla (president, 1946-52) rapidly 
turned against his Communist allies. He expelled them from his 
cabinet and then banned them completely under the 1948 Law for 
the Defense of Democracy. The PCCh remained illegal until 1958. 
He also severed relations with the Soviet Union, Yugoslavia, and 
Czechoslovakia. 

Controversy still swirls around the reasons for this about-face. 
According to Gonzalez Videla and his sympathizers, the repres- 
sion of the Communists was necessary to thwart their plots against 
his government, although no evidence has been found to substan- 
tiate that claim. According to the Communists and other critics 
of Gonzalez Videla, he acted under pressure from the United States 
and out of a desire to forge closer economic and military bonds 
with the dominant superpower. Historians have established that 
the president wanted to appease the United States, that the Unit- 
ed States encouraged a crackdown on Chilean Communists, and 
that the United States government appreciated Gonzalez Videla's 
actions and thereafter expanded the scope of its loans, investments, 
and technical missions to Chile. The United States and Chile also 
agreed to a military assistance pact while Gonzalez Videla was presi- 
dent. However, no conclusive evidence has come to light that the 
United States directly pushed him to act. 

Although Gonzalez Videla feared Communist intentions and 
respected the wishes of the United States government, he also turned 
against the PCCh for other reasons. He hoped to mollify right- 
wing critics of his government, especially landowners, to whom 
he guaranteed a continuing moratorium on peasant unionization. 
He sought to remove any ideological justification for a military coup. 
He also wanted to weaken the labor movement in a time of eco- 
nomic uncertainties, slow growth, and rising inflation, when the 
PCCh was promoting strikes. Gonzalez Videla's banning of the 



39 



Chile: A Country Study 



Communists coincided with his movement away from social re- 
form in favor of the promotion of industrial growth. 

As the Radical years (1938-52) drew to a close, Popular Front- 
style coalition politics reached a dead end. The Radicals had 
swerved to the right, the Socialists had splintered and lost votes, 
and the Communists had been forced underground. Although the 
middle and upper classes had registered some gains in those four- 
teen years, most workers had seen their real income stagnate or 
decline. Often a problem in the past, inflation had become a per- 
manent feature of the Chilean economy, fueled by the deficit spend- 
ing of a government that had grown enormously under the Radical 
presidents. Progress had been made in industrialization, but with 
little benefit to the majority of the population. Promoting urban 
industries did not generate the growth, efficiency, employment, 
or independence promised by the policy's advocates. World War 
II had left the country more dependent than ever on the United 
States, which by then had become the dominant economic power 
in Latin America. 

Populist development strategies had proved viable during the 
1930s and 1940s. The protection and credit that went along with 
import-substitution industrialization had kept manufacturers satis- 
fied. Although penalized and forced to accept low prices for their 
foods, agriculturalists welcomed expanding urban markets, low tax- 
es, and controls over rural workers. The middle class and the armed 
forces had applauded state growth and moderate nationalism. The 
more skilled and organized urban workers had received consumer, 
welfare, and union benefits superior to those offered to other lower- 
class groups. 

These allocations postponed any showdown over limited 
resources, thus enabling right and left to compromise. Political in- 
stitutionalization and accommodation prevailed, partly because the 
unorganized urban poor and especially the rural poor suffered, 
in effect, from marginality (see Glossary). Starting in the 1950s, 
however, social demands outpaced slow economic growth, and the 
political arena became increasingly crowded and heated. In addi- 
tion, accelerated mobilization, polarization, and radicalization by 
ideologically competing parties placed more and more stress on the 
"compromise state" to reconcile incompatible demands and 
projects. 

By 1952 Chileans were alienated by multiparty politics that 
produced reformist governments, which would veer to the right 
once in office. Chileans were tired of politiqueria (petty politics, po- 
litical chicanery, and pork-barrel politics). Citizens were also dis- 
mayed by slow growth and spiraling inflation. They showed their 



40 



Historical Setting 

displeasure by turning to two symbols of the past, the 1920s dicta- 
tor Ibanez and the son of former president Alessandri. 

In an effort to "sweep the rascals out," the voters elected the 
politically unaffiliated Ibanez back to the presidency in 1952. Bran- 
dishing his broom as a symbol, the "General of Victory" ran against 
all the major parties and their clientelistic system of government. 
He made his strongest attacks on the Radicals, accusing them of 
mismanagement of the economy and subservience to the United 
States. 

Along with the short-lived Agrarian Labor Party (1945-58), a 
few Communists backed Ibanez in hopes of relegalizing the PCCh; 
a few Socialists also supported him in hopes of spawning a work- 
ers' movement similar to Peronism (see Glossary) in Argentina. 
Other leftists, however, endorsed the first token presidential cam- 
paign of Salvador Allende in order to stake out an independent 
Marxist strategy for future runs at the presidency. Allende received 
only 5 percent of the vote, while Ibanez won with a plurality of 
47 percent. As it always did when no candidate captured an abso- 
lute majority, Congress ratified the top vote-getter as president. 

Ibaftez's Second Presidency, 1952-58 

Like the Radicals before him, Ibanez entered office as a reformer 
governing with a center-left coalition and ended his term as a con- 
servative surrounded by rightists. Along the way, he discarded his 
promises of economic nationalism and social justice. Also like the 
Radicals, he left festering problems for subsequent administrations. 

Early in his administration, Ibanez tried to live up to his billing 
as a nationalistic reformer. He rewarded those who had voted for 
him in the countryside by setting a minimum wage for rural 
laborers, although real wages for farm workers continued to fall 
throughout the decade. He also postured as a Latin American 
spokesman, hailing Juan Domingo Peron when the Argentine leader 
visited Chile. 

After two years of expansionary fiscal policies in league with 
reformers and a few leftists, Ibanez converted to a conservative 
program to stem inflation and to improve relations with the Unit- 
ed States copper companies. As the effort to move import- 
substitution industrialization beyond the stage of replacing foreign 
consumer goods bogged down, the economy became mired in stag- 
flation. The rates of industrialization, investment, and growth all 
slowed. Monetarist policies proposed by a team of United States 
experts, known as the Klein-Saks Mission, failed to bring infla- 
tion under control. Price increases averaged 38 percent per year 
during the 1950s. 



41 



Chile: A Country Study 



Persistent inflation stoked a debate among economists over causes 
and cures. Emphasizing deep-rooted causes and long-term solu- 
tions, advocates of structuralism (see Glossary) blamed chronic in- 
flation primarily on foreign trade dependency, insufficient local 
production (especially in agriculture), and political struggles over 
government spoils among entrenched vested interests. Their op- 
ponents, advocates of monetarism (see Glossary), attributed rising 
prices principally to classic financial causes such as currency ex- 
pansion and deficit spending. Like the Klein-Saks Mission, the 
monetarists recommended austerity measures to curb inflation. The 
structuralists denounced such belt-tightening as recessionary, inimi- 
cal to growth, and socially regressive. The monetarists replied that 
economic development would be delayed and distorted until ex- 
pansionary monetary and financial policies were corrected (see Evo- 
lution of the Economy, ch. 3). 

Adopting a monetarist approach, in 1955 Ibafiez made conces- 
sions to the United States copper companies, chiefly Anaconda and 
Kennecott, in an effort to elicit more investment. These measures 
reduced the firms' taxes and raised their profits but failed to at- 
tract much capital. Discontent with this experience underlay sub- 
sequent campaigns to nationalize the mines. 

Ibafiez also enacted reforms to increase the integrity of the elec- 
toral system. Under the new plan, the secret ballot system was im- 
proved in 1958, and stiff fines for fraud were established. These 
reforms reduced the sway of landowners and facilitated the growth 
of the Christian Democrat and Marxist political movements among 
peasants. 

Ibafiez 's middle- and working-class support flowed over to the 
Christian Democrats and the Marxists. The Christian Democratic 
Party (Partido Democrata Cristiano — PDC) was founded in 1957 
with the merger of three conservative elements: the National 
Falange, founded in 1938; the Social Christian Conservative Party; 
and the remnants of the Agrarian Labor Party that had backed 
Ibafiez. The Christian Democrats espoused reformist Catholic doc- 
trines that promised a society based on communitarianism. The 
new party appealed strongly to the middle class, women, peasants, 
and rural-urban migrants. Its displacement of the Radicals as the 
preeminent centrist party meant that a pragmatic organization was 
replaced by an ideological group less amenable to coalition and 
compromise. At the same time that the center was hardening its 
position, the right and the left were also becoming more dogmatic 
and sectarian. 

Relegalized by Ibafiez in 1958, the PCCh formed an enduring 
electoral alliance with the Socialists known as the Popular Action 



42 



Historical Setting 



Front (Frente de Accion Popular — FRAP). The Marxist parties 
embraced more militant projects for the construction of socialism 
and disdained alliances behind centrist parties. They replaced Popu- 
lar Front politics with "workers front" politics. The PCCh and 
the Socialist Party became more exclusive and radical in their ideo- 
logical commitments and in their dedication to the proletariat. Of 
the two parties, the Socialist Party posed as more revolutionary, 
especially after the 1959 Cuban Revolution. 

As they had in the 1930s, the Marxist parties experienced suc- 
cess in the 1950s in tandem with a unified national trade union 
movement. Dismayed by runaway inflation, the major labor un- 
ions replaced the fractionalized CTCh with the United Federation 
of Chilean Workers (Central Unica de Trabaj adores de Chile — 
CUTCh) in 1953. The Communists and Socialists, with their en- 
during strength in older unions in mining, construction, and 
manufacturing, took command of the new confederation. 

As the 1958 election approached, the electorate divided into three 
camps well-defined by their predominant class and ideology. The 
right represented mainly Conservatives and Liberals, the upper 
class, rural dwellers, the defenders of capitalism, and the status 
quo. In the center, the Christian Democrats and Radicals spoke 
largely for the middle class and the proponents of moderate social 
reforms to avoid socialism. On the left, the Socialists and Com- 
munists championed the working class, advocating a peaceful tran- 
sition to socialism. Rural-urban migrants and women had gained 
social and political importance. The percentage of the population 
registered to vote in presidential contests had risen from about 1 1 
percent in the 1940s to 17.5 percent in 1952 and then to 21 per- 
cent in 1958. In the 1958 election, the right — Conservatives and 
Liberals — hoped to return to power for the first time since 1938. 
Their standard-bearer was Jorge Alessandri Rodriguez, an en- 
gineering professor and the son of Chile's most recent rightist presi- 
dent. He posed as an independent who was above party politics, 
offering technocratic solutions to the nation's problems. In the 
center, the Radicals, with candidate Luis Bossay Leyva, and the 
Christian Democrats, who nominated Eduardo Frei Montalva, vied 
for moderate votes. On the left, the reunited Socialists and Com- 
munists backed Salvador Allende. 

In a preview of the 1970 election, the 1958 vote split three ways: 
31 percent for Alessandri, 29 percent for Allende, and 40 percent 
for the rest, including a strong third-place showing by Frei with 
21 percent. If it had not been for the 3 percent of the votes snared 
by a populist defrocked priest, the 15 percent won by the Radi- 
cals, and the low percentage (22 percent) of women casting ballots 



43 



Chile: A Country Study 

for Allende, the Marxists could easily have captured the presidency 
in 1958, several months before the Cuban Revolution. As it was, 
they and the Christian Democrats were highly encouraged to build 
their electoral forces toward another face-off in 1964. An especially 
noteworthy shift was the transfer of many peasant votes from the 
right to the columns of Christian Democrat and Marxist politicians 
promising agrarian reform. 

Jorge Alessandri's Rightist Term, 1958-64 

Once again, Congress approved the front-runner as president. 
Alessandri promised to restrain government intervention in the 
economy and to promote the private sector, although he did not 
envision reliance on the market to the extent that later would occur 
under Pinochet. With a slender mandate, the opposition in con- 
trol of the legislature, and a modest program, the president accom- 
plished litde of note. 

Alessandri did, however, maintain political and economic sta- 
bility. He temporarily dampened inflation, mainly by placing a 
ceiling on wages. This measure sparked mounting labor protests 
in the early 1960s. The economy grew and unemployment shrank. 
He also passed mild land reform legislation, which would be imple- 
mented mostly by his successors. His action was partly the result of 
prodding by the United States government, which backed agrarian 
reform under the auspices of the Alliance for Progress (see Glos- 
sary) in hopes of blunting the appeal of the Cuban Revolution. 
At the same time, Alessandri tried to attract foreign investment, 
although he had no intention of throwing open the economy, as 
would be done under Pinochet. By the end of Alessandri's term, 
the country was burdened with a rising foreign debt. 

In the 1964 presidential contest, the right abandoned its standard- 
bearers and gave its support to Frei in order to avert an Allende 
victory in the face of rising electoral support for the leftists. The 
center-right alliance defeated the left, 56 percent to 39 percent. The 
reformist Frei enjoyed strong United States support, both during 
and after the campaign. He also had the backing of the Roman 
Catholic Church and European Christian Democrats. Frei ran partic- 
ularly well among women, the middle class, peasants, and residents 
of the shantytowns {poblaciones callampas). Allende was most popular 
with men and blue-collar workers. 

Although Frei and Allende were foes on the campaign trail, they 
agreed on major national issues that needed to be addressed: great- 
er Chilean control over the United States-owned copper mines, agrar- 
ian reform, better housing for the residents of the sprawling shanty- 
towns, more equitable income distribution, expanded educational 



44 



Historical Setting 



opportunities, and a more independent foreign policy. They both 
criticized capitalism as a cause of underdevelopment and of the 
poverty that afflicted the majority of Chile's population. To dis- 
tinguish his more moderate program from Allende's Marxism, Frei 
promised a "Revolution in Liberty." 

Eduardo Frei's Christian Democracy, 1964-70 

After the 1965 elections gave them a majority of deputies in Con- 
gress, the Christian Democrats enacted ambitious reforms on many 
fronts. However, as a single-party government, they were often 
loath to enter into bargains, compromises, or coalitions. Conse- 
quently, rightists and leftists often opposed their congressional in- 
itiatives, especially in the Senate. 

One of the major achievements of Eduardo Frei Montalva (presi- 
dent, 1964-70) was the "Chileanization" of copper. The govern- 
ment took 51 percent ownership of the mines controlled by United 
States companies, principally those of Anaconda and Kennecott. 
Critics complained that the companies received overly generous 
terms, invested too litde in Chile, and retained too much owner- 
ship. Nevertheless, copper production rose, and Chile received a 
higher return from the enterprises. 

Frei believed that agrarian reform was necessary to raise the stan- 
dard of living of rural workers, to boost agricultural production, 
to expand his party's electoral base, and to defuse revolutionary 
potential in the countryside. Consequently, in 1967 his govern- 
ment promoted the right of peasants to unionize and strike. The 
administration also expropriated land with the intention of divid- 
ing it between collective and family farms. However, actual redis- 
tribution of land fell far short of promises and expectations. Conflict 
arose in the countryside between peasants eager for land and land- 
owners frightened of losing their rights and their property. 

During the tenure of the Christian Democrats, economic growth 
remained sluggish and inflation stayed high. Nevertheless, Frei's 
government improved income distribution and access to education, 
as enrollments rose at all levels of schooling. Under the aegis of 
"Popular Promotion," the Frei government organized many squat- 
ter communities and helped them build houses. This aided the PDC 
in its competition with the Marxists for political support in the bur- 
geoning poblaciones. At the same time, Frei enacted tax reforms that 
made tax collection more efficient than ever before. The Chris- 
tian Democrats also pushed through constitutional changes to 
strengthen the presidency; these changes later would be used to 
advantage by Allende. The PDC also revised electoral regulations, 
lowering the voting age from twenty-one to eighteen and giving 



45 



Chile: A Country Study 

the franchise to people who could not read (about 10 percent of 
the population was illiterate). 

Although friendly to United States investors and government 
officials, the Frei administration took an independent stance in for- 
eign affairs — more collegial with the developing nations and less 
hostile to the Communist-bloc nations. For instance, Frei restored 
diplomatic relations with the Soviet Union and most of its allies. 
Chile also gave strong backing to multilateral organizations, in- 
cluding the Latin American Free Trade Association (LAFTA — see 
Glossary), the Andean Group (see Glossary), the Organization of 
American States (OAS — see Glossary), and the United Nations. 
Meanwhile, aid and investment from the United States multiplied. 
Under Frei, Chile received more aid per capita from the United 
States than did any other country in Latin America. 

After the two governments that followed the Christian Democrats, 
Chileans would look back with nostalgia on the Frei administra- 
tion and its accomplishments. At the time, however, it was hounded 
by the right for being too reformist and by the left for being too 
conservative. While some on the right began forming paramilitary 
units to defend their property, some on the left began encourag- 
ing illegal seizures of farms, housing plots, and factories. Among 
the masses, the Christian Democrats raised expectations higher than 
they intended. 

As the next presidential election approached, Frei remained per- 
sonally popular, but his party's strength ebbed. With no clear win- 
ner apparent, the 1970 campaign shaped up as a rerun of 1958, 
with the right, center, and left all fielding their own candidates. 
The right hoped to recapture power and brake the pace of reform 
with former president Jorge Alessandri as the candidate of the Na- 
tional Party (Partido Nacional), established in 1965 by Conserva- 
tives and Liberals. In the center, the Christian Democrats promised 
to accelerate reform with a progressive candidate, Radomiro Tomic 
Romero. The left vowed to head down the road toward socialism 
with Salvador Allende as its nominee for the fourth time. 

Under the leadership of the Socialist Party and the PCCh, the 
leftist coalition of 1970 called itself Popular Unity (Unidad Popu- 
lar). Joining the alliance were four minor parties, including the 
shrunken Radical Party and defectors from the Christian Demo- 
crats, most notably the United Popular Action Movement (Movi- 
miento de Accion Popular Unitario — MAPU). The coalition was 
reminiscent of the Popular Front of 1936-41, except that it was 
led by the Marxist parties and a Marxist candidate. Farther to the 
left, the Movement of the Revolutionary Left (Movimiento de la 



46 



Historical Setting 



Izquierda Revolucionaria — MIR), a small organization headed by 
radicalized students, scoffed at the electoral route, called for armed 
struggle, and undertook direct assaults on the system, such as bank 
robberies (see Terrorism, ch. 5). 

To the surprise of most pollsters and prognosticators, Allende 
nosed out Alessandri 36.2 percent to 35 percent in the September 
4, 1973, elections; Tomic trailed with 27.8 percent of the vote. In 
the Cold War context of the times, the democratic election of a 
Marxist president sent a shock wave around the globe. The seven 
weeks between the counting of the ballots and the certification of the 
winner by Congress crackled with tension. Attempts by the United 
States and by right-wing groups in Chile to convince Congress to 
choose the runner-up Alessandri or to coax the military into staging 
a coup d'etat failed. A botched kidnapping planned by right-wing 
military officers resulted in the assassination of the army commander 
in chief, General Rene Schneider Chereau, on October 22, 1970, 
the first major political killing in Chile since the death of Portales 
in 1837. That plot backfired by ensuring the armed forces' support 
of a constitutional assumption of power by Allende. 

After extracting guarantees of adherence to democratic proce- 
dures from Allende, the Christian Democrats in Congress followed 
tradition and provided the votes to make the front-runner Chile's 
new president. Although a minority president was not unusual, 
one with such a drastic plan to revolutionize the nation was unique. 
Allende was inaugurated on November 3, 1970. 

Salvador Allende's Leftist Regime, 1970-73 

The Allende experiment enjoyed a triumphant first year, followed 
by two disastrous final years. According to Popular Unity, Chile 
was being exploited by parasitic foreign and domestic capitalists. 
The government therefore moved quickly to socialize the econo- 
my, taking over the copper mines and other foreign firms, oligop- 
olistic industries, banks, and large estates. By a unanimous vote 
of Congress in 1971, the government totally nationalized the for- 
eign copper firms, which were mainly owned by two United States 
companies, Kennecott and Anaconda. The nationalization mea- 
sure was one of the few bills Allende ever got through the opposition- 
controlled legislature, where the Christian Democrats constituted 
the largest single party. 

Socialization of the means of production spread rapidly and wide- 
ly. The government took over virtually all the great estates. It turned 
the lands over to the resident workers, who benefited far more than 
the owners of tiny plots or the numerous migrant laborers. By 1972 
food production had fallen and food imports had risen. Also during 



47 



Chile: A Country Study 

1971-72, the government dusted off emergency legislation from 
the 1932 Socialist Republic to allow it to expropriate industries 
without congressional approval. It turned many factories over to 
management by the workers and the state. 

In his first year, Allende also employed Keynesian measures to 
hike salaries and wages, thus pumping up the purchasing power 
of the middle and working classes. This "consumer revolution" 
benefited 95 percent of the population in the short run because prices 
were held down and employment went up. Producers responded 
to rising demand by employing previously underused capacity. 

Politically, Allende faced problems holding his Popular Unity 
coalition together, pacifying the more leftist elements inside and 
outside Popular Unity and, above all, coping with the increasingly 
implacable opposition. Within Popular Unity, the largest party was 
the Socialist Party. Although composed of multiple factions, the 
Socialist Party mainly pressed Allende to accelerate the transition 
toward socialism. The second most important element was the 
PCCh, which favored a more gradual, legalistic approach. Out- 
side Popular Unity, the most significant left-wing organization was 
the MIR, a tiny but provocative group that admired the Cuban 
Revolution and encouraged peasants and workers to take property 
and the revolutionary process into their own hands, much faster 
than Allende preferred. 

The most important opposition party was the PDC. As it and 
the middle sectors gradually shifted to the right, they came to form 
an anti-Allende bloc in combination with the National Party and 
the propertied class. Even farther to the right were minuscule, 
paramilitary, quasi-fascist groups like Fatherland and Liberty 
(Patria y Libertad), determined to sabotage Popular Unity. 

The Popular Unity government tried to maintain cordial rela- 
tions with the United States, even while staking out an indepen- 
dent position as a champion of developing nations and socialist 
causes. It opened diplomatic relations with Cuba, China, the Dem- 
ocratic People's Republic of Korea (North Korea), the Democratic 
Republic of Vietnam (North Vietnam), and Albania. It befriend- 
ed the Soviet Union, which sent aid to the Allende administration, 
although far less than Cuba received or than Popular Unity had 
hoped for. 

Meanwhile, the United States pursued a two-track policy toward 
Allende 's Chile. At the overt level, Washington was frosty, espe- 
cially after the nationalization of the copper mines; official rela- 
tions were unfriendly but not openly hostile. The government of 
President Richard M. Nixon squeezed the Chilean economy by 
terminating financial assistance and blocking loans from multilateral 



48 



Historical Setting 



organizations, although it increased aid to the military, a sector 
unenthusiastic toward the Allende government. It was widely 
reported that at the covert level the United States worked to destabi- 
lize Allende 's Chile by funding opposition political groups and me- 
dia and by encouraging a military coup d'etat. Most scholars have 
concluded that these United States actions contributed to the down- 
fall of Allende, although no one has established direct United States 
participation in the coup d'etat, and very few would assign the Unit- 
ed States the primary role in the destruction of that government. 

During the second and third years of Popular Unity, demand out- 
stripped supply, the economy shrank, deficit spending snowballed, 
new investments and foreign exchange became scarce, the value of 
copper sales dropped, shortages appeared, and inflation skyrocket- 
ed, eroding the previous gains for the working class. A thriving black 
market sprang up. The government responded with direct distri- 
bution systems in working-class neighborhoods. Worker participa- 
tion in the management of enterprises reached unprecedented 
proportions. The strapped government could not keep the economy 
from going into free fall because it could not impose austerity mea- 
sures on its supporters in the working class, get new taxes approved 
by Congress, or borrow enough money abroad to cover the deficit. 

Although the right was on the defensive in Allende' s first year, 
it moved on the offensive and forged an alliance with the center 
in the next two years. In Congress this center-right coalition erected 
a blockade against all Popular Unity initiatives, harassed Popular 
Unity cabinet ministers, and denounced the administration as 
illegitimate and unconstitutional, thus setting the stage for a military 
takeover. The most acrimonious battle raged over the boundaries 
of Popular Unity's "social property area" (area de propriedad social) , 
which would incorporate private holdings through government 
intervention, requisition, or expropriation. The Supreme Court and 
the comptroller general of the republic joined Congress in criticiz- 
ing the executive branch for overstepping its constitutional bounds. 

Allende tried to stabilize the situation by organizing a succes- 
sion of cabinets, but none of them guaranteed order. His appoint- 
ment of military officers to cabinet posts in 1972 and 1973 also failed 
to stifle the opposition. Instead, it helped politicize the armed ser- 
vices. Outside the government, Allende 's supporters continued 
direct takeovers of land and businesses, further disrupting the econ- 
omy and frightening the propertied class. 

The two sides reached a showdown in the March 1973 congres- 
sional elections. The opposition expected the Allende coalition to 
suffer the typical losses of Chilean governments in midterm elec- 
tions, especially with the economy in a tailspin. The National Party 



49 



Chile: A Country Study 

and PDC hoped to win two-thirds of the seats, enough to impeach 
Allende. They netted 55 percent of the votes, not enough of a 
majority to end the stalemate. Moreover, Popular Unity's 43 per- 
cent share represented an increase over the presidential tally of 36.2 
percent and gave Allende 's coalition six additional congressional 
seats; therefore, many of his adherents were encouraged to forge 
ahead . 

In the aftermath of the indecisive 1973 congressional elections, 
both sides escalated the confrontation and hurled threats of insur- 
gency. Street demonstrations became almost daily events and in- 
creasingly violent. Right-wing groups, such as Fatherland and 
Liberty, and left-wing groups, such as the MIR, brandished arms 
and called for a cataclysmic solution. The most militant workers 
formed committees in their neighborhoods and workplaces to press 
for accelerated social change and to defend their gains. The oppo- 
sition began openly knocking on the doors of the barracks in hopes 
that the military would provide a solution. 

The regular armed forces halted an attempted coup by tank com- 
manders in June 1973, but that incident warned the nation that 
the military was getting restless. Thereafter, the armed forces pre- 
pared for a massive coup by stepping up raids to search for arms 
among Popular Unity's supporters. Conditions worsened in June, 
July, and August, as middle- and upper-class business proprietors 
and professionals launched another wave of workplace shutdowns 
and lockouts, as they had in late 1972. Their 1973 protests against 
the government coincided with strikes by the trucking industry and 
by the left's erstwhile allies among the copper workers. The Na- 
tionalists, the Christian Democrats, and conservative students 
backed the increasingly subversive strikers. They called for Allende 's 
resignation or military intervention. Attempts by the Catholic 
Church to get the PDC and Popular Unity to negotiate a com- 
promise came to naught. Meanwhile, inflation reached an annual 
rate of more than 500 percent. By mid- 1973 the economy and the 
government were paralyzed. 

In August 1973, the rightist and centrist representatives in the 
Chamber of Deputies undermined the president's legitimacy by 
accusing him of systematically violating the constitution and by 
urging the armed forces to intervene. In early September, Allende 
was preparing to call for a rare national plebiscite to resolve the 
impasse between Popular Unity and the opposition. The military 
obviated that strategy by launching its attack on civilian authority 
on the morning of September 1 1 . Just prior to the assault, the com- 
manders in chief, headed by the newly appointed army commander, 



50 



Historical Setting 



General Augusto Pinochet Ugarte, had purged officers sympathetic 
to the president. 

Allende committed suicide while defending (with an assault rifle) 
his socialist government against the coup d'etat. Although sporadic 
resistance to the coup erupted, the military consolidated control 
much more quickly than it had believed possible. Many Chileans 
had predicted that a coup would unleash a civil war, but instead 
it ushered in a long period of repression. 

Debate continues over the reasons for Allende 's downfall. Why 
did he fail to preserve democracy or achieve socialism? Critics of the 
left blamed Allende for going to extremes, destroying the economy, 
violating the constitution, and undermining the spirit if not the 
letter of democracy. Right-wing critics in particular accused the 
left of even plotting an armed takeover, a charge that was never 
proved. Critics also assailed Popular Unity for being unclear about 
the limits of its reforms and thus frightening the middle class into 
the arms of the opposition. Critics of the right accused Popular Unity, 
in conjunction with the United States, of ruining the economy and 
of calling out the armed forces to protect its property and privileges. 
Observers in general scolded the far left for its adventurous ex- 
cesses. The far left retorted that Popular Unity failed because it 
was too timid to arm the masses. Critics of the Christian Democrats 
chastised them for refusing to compromise, locking arms with the 
rightist opposition, and failing to defend democracy. 

Many analysts would concur that there was ample blame to go 
around. In the view of many Chileans, groups at all points on the 
political spectrum helped destroy the democratic order by being 
too ideological and too intransigent. Many observers agree that 
a minority president facing adamant domestic and foreign opposi- 
tion was extremely unlikely to be able to uphold democracy and 
create socialism at the same time. In the late 1980s, polls also showed 
that most Chileans did not want to try the Popular Unity experi- 
ment again, especially in light of its aftermath. 

Military Rule, 1973-90 

The armed forces justified the coup as necessary to stamp out 
Marxism, avert class warfare, restore order, and salvage the econ- 
omy. They enshrined the National Security Doctrine, which de- 
fined their primary task as the defeat of domestic enemies who had 
infiltrated national institutions, including schools, churches, politi- 
cal parties, unions, and the media. Although civilians filled prom- 
inent economic posts, military officers took most government 
positions at the national and local levels. Immediately on seizing 
power, the military junta — composed of the commanders in chief 



51 



Chile: A Country Study 

of the army, navy, air force, and Carabineros — issued a barrage 
of decrees to restore order on its own terms. 

The first phase of the dictatorship (1973-75) was mainly des- 
tructive, aimed at rapid demobilization, depoliticization, and stabili- 
zation. The armed forces treated Popular Unity as an enemy to 
be obliterated, not just as an errant political movement to be booted 
from office. The military commanders closed Congress, censored 
the news media, purged the universities, burned books, declared 
political parties outlawed if Marxist or if in recess otherwise, and 
banned union activities. 

The worst human rights abuses occurred in the first four years 
of the junta, when thousands of civilians were murdered, jailed, 
tortured, brutalized, or exiled, especially those linked with the Popu- 
lar Unity parties. The secret police, reporting to Pinochet through 
the National Intelligence Directorate (Direccion Nacional de 
Inteligencia — DINA), replaced in 1977 by the National Informa- 
tion Center (Centro Nacional de Informacion — CNI), kept dissi- 
dents living in fear of arrest, torture, murder, or "disappearance." 

Throughout the second half of the 1970s, the Roman Catholic 
Church and international organizations concerned with human 
rights denounced the widespread violations of decency in Chile. 
Although officially neutral, the Roman Catholic Church became 
the primary sanctuary for the persecuted in Chile from 1975 to 
1985 and so came into increasing conflict with the junta. 

The former members of Popular Unity went underground or 
into exile. In the early years of the dictatorship, their main goal 
was simply to survive. Although the Communists suffered brutal 
persecution, they managed to preserve their organization fairly in- 
tact. The Socialists splintered so badly that their party nearly dis- 
appeared by the end of the 1970s. Draconian repression left the 
Marxists with no capacity to resist or counterattack. They did, 
however, manage to rally world opinion against the regime and 
keep it isolated diplomatically. By the end of the 1970s, most Chris- 
tian Democrats, after initially cooperating with the junta, had also 
joined the opposition, although not in any formal coalition with 
any coherent strategy for restoring democracy. 

Pinochet soon emerged as the dominant figure and very shortly 
afterward as president. After a brief flirtation with corporatist ideas, 
the government evolved into a one-man dictatorship, with the rest 
of the junta acting as a sort of legislature. In 1977 Pinochet dashed 
the hopes of those Chileans still dreaming of an early return to 
democracy when he announced his intention to institutionalize an 
authoritarian regime to preside over a protracted return to civilian 
rule in a "protected" democracy. 



52 



Historical Setting 



Pinochet established iron control over the armed forces as well 
as the government, although insisting that they were separate enti- 
ties. He made himself not only the chief executive of the state but 
also the commander in chief of the military. He shuffled commands 
to ensure that loyalists controlled all the key posts. He appointed 
many new generals and had others retire, so that by the 1980s all 
active-duty generals owed their rank to Pinochet. He also improved 
the pay and benefits of the services. The isolation of the armed 
forces from civilian society had been a virtue under the democra- 
cy, inhibiting their involvement in political disputes; now that erst- 
while virtue became an impediment to redemocratization, as the 
military remained loyal to Pinochet and resisted politicization by 
civilians. 

Although aid and loans from the United States increased spec- 
tacularly during the first three years of the regime, while presi- 
dents Nixon and Gerald R. Ford were in office, relations soured 
after Jimmy Carter was elected president in 1976 on a platform 
promising vigorous pursuit of human rights as a major component 
of his foreign policy. During the Carter administration, a signifi- 
cant source of contention was the 1976 assassination in Washing- 
ton of the former Chilean ambassador to the United States by agents 
of Pinochet's secret police. The target, Orlando Letelier, had served 
under Allende. In response to United States criticism, General 
Pinochet held his first national plebiscite in 1978, calling for a yes 
or no vote on his defense of Chile's sovereignty and the institu- 
tionalization of his regime. The government claimed that more than 
75 percent of the voters in the tightly controlled referendum en- 
dorsed Pinochet's rule. 

Neoliberal Economics 

By the mid-1970s, the dictatorship switched from destroying the 
old order to constructing its version of a new Chile. The junta not 
only overturned decades of democratic government but also de- 
cades of statist economic policies, which had mainly protected in- 
dustrialists and organized workers. The new economic program 
was designed by civilian technocrats known as the "Chicago boys" 
(see Glossary) because many of them had been trained or influenced 
by University of Chicago professors. The government instituted 
a dramatic conversion to free-market economics in 1975. 

After curbing inflation and returning a significant amount of 
property to its former owners, the administration embarked on a 
radical program of liberalization and privatization, slashing tariffs 
as well as government welfare programs and deficits. As a result, 
the economy grew rapidly from 1976 to 1981, a feat heralded as 



53 



Chile: A Country Study 



the "Chilean miracle." That growth was fueled by the influx of 
private foreign loans until the debt crisis of the early 1980s. Financial 
conglomerates became the major beneficiaries of the open economy 
and the flood of foreign bank loans. Exports of nontraditional com- 
modities, especially fruit, timber, and fish products, also grew im- 
pressively; the value of new exportables came to equal that of copper 
sales. Despite high growth in the late 1970s, income distribution 
became more regressive, and unemployment stayed in double digits. 
The underemployed informal sector also mushroomed in size. The 
regime responded with a "minimum employment" public works 
program (see The Military Government's Free-Market Reforms, 
1973-90, ch. 3). 

In conjunction with the liberalization of the economy, the junta 
implemented a series of social reforms to reduce the role of the cen- 
tral government in social security, labor disputes, health care, and 
education. These reforms fit with the desire to shrink the central 
government, decentralize administration, and privatize previous 
state functions. Critics charged that the welfare state was being dis- 
mantled to leave citizens at the mercy of the marketplace. The re- 
gime retorted that it was focusing its social assistance on the poorest 
of the poor to meet basic needs, and it pointed with pride to im- 
provement in such indicators as infant mortality (see Welfare In- 
stitutions and Social Programs, ch. 2; Economic Results of the 
Pensions Privatization, ch. 3). 

The most important of the government's so-called moderniza- 
tions in social policy was the 1979 Labor Plan. The regime had 
already outlawed the CUTCh, Marxist union leaders, several 
Marxist unions, union elections, strikes, and collective bargain- 
ing. Nevertheless, after bearing the brunt of repression in 1973-74, 
unions gradually revived in the late 1970s. Little by little, cooper- 
ation increased between Marxist and Christian Democrat union 
leaders, the latter making gains because the former were outlawed. 
Although a few unions supported the government, most firmly op- 
posed the regime and its economic program. The Labor Plan sought 
to codify the dictatorship's antilabor policies. It placed stringent 
limits on collective bargaining, strikes, and other union activities, 
especially any participation in politics. Almost all labor unions re- 
jected the Labor Plan and aligned with the opposition (see Unions 
and Labor Conflicts, ch. 3). 

The 1980 Constitution 

At the height of the economic boom, the regime moved to 
legitimize and regularize its reforms and its tenure. Its new "con- 
stitution of liberty" was approved in a controlled plebiscite in 1980, 



54 



Historical Setting 



in which the government claimed to have received 67 percent of 
the vote. Both leftists and Christian Democrats had called for a 
no vote. Because there were no safeguards for the opposition or 
for the balloting, most analysts expressed doubts about the govern- 
ment's percentage and assumed that the constitution may have won 
by a lesser margin. According to the new constitution, Pinochet 
would remain president through 1989; a plebiscite in 1988 would 
determine if he would have an additional eight years in office. The 
document provided for military domination of the government both 
before and after the 1988 plebiscite. 

The constitution's approval marked the institutionalization of 
Pinochet's political system. In the eyes of the military, a dictator- 
ship had now been transformed into an authoritarian regime, rule 
by exception having been replaced by the rule of law. When the 
new charter took effect in 1981, the dictatorship was at the peak 
of its powers, politically untouchable and economically successful. 
At that moment, few would have predicted that the dispirited and 
fragmented opposition would take power by the end of the decade. 

The imposition of the authoritarian constitution cast further 
gloom on the divided and dejected opposition. The PCCh now made 
a historic reversal, claiming that all forms of struggle, including 
armed insurrection, were justified against the dictatorship. Most 
political parties on the left or in the center, however, continued 
searching for a peaceful path to redemocratization. 

The Crisis of 1982 and the Erosion of Military Rule 

From 1982 to 1990, Chile underwent a prolonged journey back 
to democracy. During that process, the country experienced five 
crucial changes. First, the economic collapse in 1982 provoked some 
adjustments to the neoliberal model and sparked widespread pro- 
tests against the regime. That recession was compounded by the 
international debt crisis. 

Second, although most of the regime's supporters in the busi- 
ness community and the armed forces held fast, the 1980s witnessed 
a weakening of their attachment to authoritarianism and a few defec- 
tions from their ranks. Third, civilian society became emboldened. 
A series of demonstrations against Pinochet during 1983-85 spread 
from organized labor to the middle class and finally ended up con- 
centrated among the residents of the urban shanty towns. Fourth, 
the previously repressed and dormant political parties came back 
to life. They took charge during the 1988 plebiscite that effectively 
ended the Pinochet regime and the subsequent 1989 elections for 
president and Congress. Fifth, after being surrounded by like- 
minded dictators in South America, Pinochet became isolated as 



55 



Chile: A Country Study 

a tide of democratization swept the continent, and the United States 
and Europe began applying pressure for Chile to join the trend. 

In sum, from its apogee in the 1980 plebiscite to its exit in 1990, 
the authoritarian regime lost support and saw its opponents gain 
momentum and eventually power. During its first decade, however, 
the dictatorship had brought about profound and seemingly dura- 
ble changes. Politically, it had pulverized the revolutionary Marxist 
left. Economically, it had moved Chile's focus from the state to 
the market. Socially, it had fostered a new emphasis on individu- 
alism and consumerism, widening the gap between rich and poor, 
even while helping some of the most destitute. What it had failed 
to do was to extirpate the preference of most Chileans for democ- 
racy. 

* * * 

Among works in English, an outstanding general history is Brian 
Loveman's Chile: The Legacy of Hispanic Capitalism. For the colonial 
period, Eugene H. Korth provides a useful introduction in Span- 
ish Policy in Colonial Chile. The subsequent Bourbon years are cov- 
ered by Jacques A. Barbier in Reform and Politics in Bourbon Chile, 
1755-1796. 

For the nineteenth century, the work to begin with is Simon Col- 
lier's Ideas and Politics of Chilean Independence. The development of 
the system of land tenure is examined by Arnold J. Bauer in Chilean 
Rural Society from the Spanish Conquest to 1930. The country's exter- 
nal relations are analyzed by Robert N. Burr in By Reason or Force. 
Works covering the nitrate era and the Balmaceda controversy in- 
clude Thomas F. O'Brien's The Nitrate Industry and Chile's Crucial 
Transition, 1870-1891; Michael Monteon's Chile in the Nitrate Era; 
Maurice Zeitlin's The Civil Wars in Chile, 1851 and 1859; and Harold 
Blakemore's British Nitrates and Chilean Politics, 1886-1896. 

Chilean relations with the United States can be surveyed in 
Fredrick B. Pike's Chile and the United States , 1880-1962 and in Wil- 
liam F. Sater's Chile and the United States. General coverage of the 
economy is found in Markos J. Mamalakis's The Growth and Struc- 
ture of the Chilean Economy. A classic work on the copper industry 
is Theodore H. Moran's Multinational Corporations and the Politics 
of Dependence. The development of organized labor is explained in 
Peter de Shazo's Urban Workers and Labor Unions in Chile, 1902-1927 
and in Alan Angell's Politics and the Labour Movement in Chile. On 
rural conflicts, valuable sources include Brian Loveman's Struggle 
in the Countryside and Thomas C. Wright's Landowners and Reform 
in Chile. Concerning the role of the Catholic Church, the key source 



56 



Historical Setting 



is Brian H. Smith's The Church and Politics in Chile. The armed forces 
are covered in Frederick M. Nunn's The Military in Chilean History. 

The evolution of the political system is discussed by Timothy 
R. Scully in Rethinking the Center. Political developments leading 
up to the tragedy under Allende are traced by Paul W. Drake in 
Socialism and Populism in Chile, 1932-52, by Federico G. Gil in The 
Political System of Chile, and by James F. Petras in Politics and Social 
Forces in Chilean Development. 

The two most controversial governments in Chilean history have 
generated a voluminous literature. On the Allende experiment, the 
best books to start with are Stefan de Vylder's Allende 's Chile; Edy 
Kaufman's Crisis in Allende 's Chile; Ian Roxborough, Philip O'Brien, 
and Jackie Roddick's Chile: The State and Revolution; Paul E. Sig- 
mund's The Overthrow of Allende and the Politics of Chile, 1964-1976; 
Barbara Stallings's Class Conflict and Economic Development in Chile, 
1958-1973; Arturo Valenzuela's The Breakdown of Democratic Re- 
gimes: Chile; and Peter Winn's Weavers of Revolution. 

The first half of the Pinochet period is dissected by J. Samuel 
Valenzuela and Arturo Valenzuela in Military Rule in Chile, the 
second half by Paul W. Drake and Ivan Jaksic in The Struggle for 
Democracy in Chile, 1982-1990, and the entire seventeen years by 
Pamela Constable and Arturo Valenzuela in A Nation of Enemies. 
Analyses of the dictatorship's economic innovations are provided 
in Sebastian Edwards and Alejandra Cox Edwards's Monetarism and 
Liberalization and in Alejandro Foxley Riesco's Latin American Ex- 
periments in Neoconservative Economics. (For further information and 
complete citations, see Bibliography.) 



57 



Chapter 2. The Society and Its Environment 



A Mapuche rug representing a chilko, a plant reputed to cure 
cardiovascular illnesses 



The development of Chilean society since the 

country broke away from Spain early in the nineteenth century 
reflects in many ways a significant incongruity. On the one hand, 
the nation's political institutions and many of its social institutions 
developed much like their counterparts in the United States and 
Western Europe. On the other hand, the economy had a history 
of insufficient and erratic growth that left Chile among the less de- 
veloped nations of the world. Given the first of these characteris- 
tics, Chilean society, culture, and politics have struck generations 
of observers from more developed nations as having what can be 
described, for want of a better expression, as a familiar "moder- 
nity." Yet this impression always seemed at odds with the lack of 
resources at all levels, the highly visible and extensive urban and 
rural poverty, and the considerable social inequalities. 

Chile's location on the far southern shores of the Americas' Paci- 
fic Coast made international contacts difficult until the great advance 
in global air travel and communications of the post-World War 
II period. This relative isolation of a people whose main cultural 
roots lay in the Iberian-Catholic variant of Western civilization 
probably had the paradoxical effect of making Chileans more recep- 
tive to outside influences than would otherwise have been the case. 
The small numbers of foreign travelers reaching the country in the 
nineteenth and early twentieth centuries usually found a warm wel- 
come from people eager to hear of the latest trends in leading na- 
tions. The immigrants to the country were similarly accepted quite 
readily, and those who were successful rapidly gained entry into 
the highest social circles. One result was a disproportionate number 
of non-Iberian names among the Chilean upper classes. Moreover, 
many Chileans, the wealthy as well as artists, writers, scientists, 
and politicians, found it virtually obligatory to make the long voyage 
to experience firsthand the major cities of Europe and the United 
States, and they rapidly absorbed whatever new notions were 
emerging in more advanced nations. 

At the same time, Chile's physical isolation probably buttressed 
the commitment of the nation's leaders in all walks of life to build- 
ing strong national institutions, which then developed their pecu- 
liarly Chilean features. For example, the rich could not easily en- 
vision sending their children to universities in Europe or the United 
States, and this created a demand that would not otherwise have 
existed for strong domestic centers of higher learning. A feeling of 



61 



Chile: A Country Study 

pride in these various institutions soon developed that contributed 
to the Chileans' strong sense of national identity. 

This combination of openness to outside influences and com- 
mitment to the nation is undoubtedly related to the relative "moder- 
nity" that has been a feature of Chilean life since independence 
from Spain. From the very first national administrations, there was 
a strong expression of commitment to expanding the availability 
of education to both boys and girls, principally at the primary level. 
The University of Chile was established by the national govern- 
ment in 1842 and soon had a large, centrally located building in 
Santiago. In a matter of decades, the university became one of the 
most respected institutions of higher learning in Latin America. 
Women were admitted to the University of Chile beginning in 1877, 
making it a world pioneer in coeducational instruction; by 1932 
about a third of the university's enrollment was female. 

In the Americas, Chile was second only to Uruguay in creating 
state-run welfare institutions, adopting a relatively comprehensive 
social security system in 1924, more than a decade before the United 
States. A national health system was created by pooling existing 
state-founded institutions into a comprehensive organization in 
1952. Under this program, curative and emergency care were 
provided free of charge to workers and the poor; in the early 1960s, 
preventive care became available to all infants and mothers. 

However, inadequate development of the economy undermined 
Chile's relatively modern institutional edifice. The lack of resources 
often led to sharp conflicts between different groups trying to ob- 
tain larger pieces of a meager pie. As better placed and politically 
more influential groups were able to draw disproportionate benefits 
for themselves, inequalities were generated, as was made appar- 
ent by the wide disparities in the pension benefits that were paid 
by the state-run system. Despite the government's early commit- 
ment to public education, budgetary limitations meant that illiter- 
acy decreased very slowly. By 1930 about a quarter of the adult 
population still could not read or write, a low proportion by Latin 
American standards but a far cry from the universal literacy exist- 
ing at the time in France, Germany, and Belgium, whose educa- 
tional systems had served as models for Chilean public education. 
Primary school attendance only approached universal levels in the 
1960s, and full adult literacy was not achieved until the 1980s. The 
lack of educational opportunities limited social mobility, and invest- 
ments in new technologies often ran into the difficulty of not hav- 
ing properly trained workers. The nation's industries, mines, and 
farms had at their disposal a large pool of unskilled or semiskilled 



62 



The Society and Its Environment 



workers, and for most jobs the wages, benefits, and working condi- 
tions were generally deplorable. On numerous occasions, worker 
demands met with heavy-handed repression, and class divisions 
became deep fault lines in Chilean society. 

The military government that took over after the bloody coup 
of 1973 embarked on a different course from that followed by the 
country's governments over the previous half-century. Based on 
economic neoliberalism, the military regime's primary objectives 
were to reduce the size of the state and limit its intervention in 
national institutions. Most state-owned industries and the state- 
run social security system were privatized, private education at all 
levels was encouraged, and labor laws limiting union rights were 
enacted. Although new programs enhancing prior efforts to deal 
with the poorest segments of the population were successfully put 
into place, the authoritarian regime's overall social and economic 
policies led to increased inequalities. 

At the start of the 1990s, Chile began to recover its democratic 
institutions under the elected government of Patricio Aylwin Azo- 
car (president, 1990-94). Committed to redressing the social in- 
equalities that had developed under the military regime, the new 
government allocated more resources to programs and institutions 
in education and health in order to improve their quality and the 
population's access to them. Although the Aylwin administration 
made some changes in these institutions, there was no attempt to 
undo the privatization of the social security system, which was now 
based on individual capitalization schemes rather than on the old 
state-run, pay-as-you-go system. 

In 1993 and early 1994, there was a sharp sense of optimism 
regarding the Chilean economy. High rates of economic growth 
were expected to last through the 1990s. With its newfound eco- 
nomic dynamism, Chile seemed poised in the early 1990s to begin 
resolving the long-standing incongruity of a relatively advanced 
social and political system coexisting with a scarcity of means. 

Geography 

A Long, Narrow Nation 

In a classic book on the natural setting and people of Chile, Ben- 
jamin Subercaseaux Zanartu, a Chilean writer, describes the coun- 
try's geography as loca (crazy). The book's English translator 
renders this term as "extravagant." Whether crazy or extravagant, 
there is litde question that Chile's territorial shape is certainly among 
the world's most unusual. From north to south, Chile extends 4,270 
kilometers, and yet it only averages 177 kilometers east to west. 



63 



Chile: A Country Study 

On a map, Chile looks like a long ribbon reaching from the mid- 
dle of South America's west coast straight down to the south- 
ern tip of the continent, where it curves slightly eastward. Cape 
Horn, the southernmost point in the Americas, where the Pacific 
and Atlantic oceans turbulently meet, is Chilean territory. Chile's 
northern neighbors are Peru and Bolivia, and its border with 
Argentina to the east, at 5,150 kilometers, is one of the world's 
longest (see fig. 4). 

Chile's shape was determined by the fact that it began as a Span- 
ish settlement on the western side of the mighty cordillera of the 
Andes, in the central part of the country. This range, which in- 
cludes the two tallest peaks in the Americas — Aconcagua (6,959 
meters) and Nevado Ojos del Salado (6,880 meters) — is a formid- 
able barrier, whose passes to the Argentine side are covered by 
a heavy blanket of snow during the winter months. As a result, 
Chile could expand beyond its original colonial territory only to 
the south and north. The colony grew southward by occupying lands 
populated by indigenous groups, and it grew northward by occupy- 
ing sections of both Peru and Bolivia that were eventually award- 
ed to Chile in the aftermath of the War of the Pacific (1879-83). 

The northern two-thirds of Chile lie on top of the telluric Nazca 
Plate, which, moving eastward about ten centimeters a year, is forc- 
ing its way under the continental plate of South America. This 
movement has resulted in the formation of the Peru-Chile Trench, 
which lies beyond a narrow band of coastal waters off the north- 
ern two- thirds of the country. The trench is about 150 kilometers 
wide and averages about 5,000 meters in depth. At its deepest point, 
just north of the port of Antofagasta, it plunges to 8,066 meters. 
Although the ocean's surface obscures this fact, most of Chile lies 
at the edge of a profound precipice. 

The same telluric displacements that created the Peru-Chile 
Trench make the country highly prone to earthquakes. During the 
twentieth century, Chile has been struck by twenty-eight major 
earthquakes, all with a force greater than 6.9 on the Richter scale 
(see Glossary). The strongest of these occurred in 1906 (register- 
ing an estimated 8.4 on the Richter scale) and in 1960 (reaching 
8.75). This latter earthquake occurred on May 22, the day after 
another major quake measuring 7.25 on the Richter scale, and cov- 
ered an extensive section of south-central Chile. It caused a tidal 
wave that decimated several fishing villages in the south and raised 
or lowered sections of the coast as much as two meters. The clash 
between the earth's surface plates has also generated the Andes, 
a geologically young mountain range that, in Chilean territory 
alone, includes about 620 volcanoes, many of them active. Almost 



64 



The Society and Its Environment 



sixty of these had erupted in the twentieth century by the early 
1990s. More than half of Chile's land surface is volcanic in origin. 

About 80 percent of the land in Chile is made up of mountains 
of some form or other. Most Chileans live near or on these moun- 
tains. The majestically snowcapped Andes and their precordillera 
elevations provide an ever-present backdrop to much of the scenery, 
but there are other, albeit less formidable, mountains as well. 
Although they seemingly can appear anywhere, the non- Andean 
mountains usually form part of transverse and coastal ranges. The 
former, located most characteristically in the near north and the 
far north natural regions, extend with various shapes from the Andes 
to the ocean, creating valleys with an east- west direction. The lat- 
ter are evident mainly in the center of the country and create what 
is commonly called the Central Valley (Valle Central) between them 
and the Andes. In the far south, the Central Valley runs into the 
ocean's waters. At this location, the higher elevations of the coastal 
range facing the Andes become a multiplicity of islands, forming 
an intricate labyrinth of channels and fjords that have been an en- 
during challenge to maritime navigators. 

Much of Chile's coastline is rugged, with surf that seems to ex- 
plode against the rocks lying at the feet of high bluffs. This collision 
of land and sea gives way every so often to lovely beaches of various 
lengths, some of them encased by the bluffs. The Humboldt current, 
which originates northwest of the Antarctic Peninsula (which juts 
into the Bellingshausen Sea) and runs the full length of the Chilean 
coast, makes the water frigid. Swimming at Chile's popular beaches 
in the central part of the country, where the water gets no warmer 
than 15°C in the summer, requires more than a bit of fortitude. 

Chilean territory extends as far west as Polynesia. The best known 
of Chile's Pacific islands is Easter Island (Isla de Pascua, also known 
by its Polynesian name of Rapa Nui), with a population of 2,800 
people. Located 3,600 kilometers west of Chile's mainland port 
of Caldera, just below the Tropic of Capricorn, Easter Island pro- 
vides Chile a gateway to the Pacific. It is noted for its 867 monoliths 
(Moais), which are huge (up to twenty meters high) and mysteri- 
ous, expressionless faces sculpted of volcanic stone (see fig. 5). The 
Islas Juan Fernandez, located 587 kilometers west of Valparaiso, 
are the locale of a small fishing settlement. They are famous for 
their lobster and the fact that one of the islands, Isla Robinson Cru- 
soe, is where Alexander Selkirk, the inspiration for Daniel Defoe's 
novel, was marooned for about four years. 

Natural Regions 

Chile may have a "crazy" geography, but it is also a land of 



67 




Figure 4. Topography and Drainage 



Chile: A Country Study 



Boundary representation 
not necessarily authoritative 



Sou ^ Pacific 



O. 



Cerro Terevaka 
A (507) 



Punta San Juan 

Caleta Anakena 

Punta Rosalia 

Bahi'a La 
\|^> Perouse 

m 



f Cerro Puhi 
▲ (302) 



» Volcani ' 
i Rano ' " 
i Raraku <a 



Cabo 
O'Higgins 



Vol can 
A Pukatiki 
(370) 



Cabo 
Cumming 



Hanga Roa\ ? / Ce . rro Tuutapu ^ 

A (270) _ ^-C 

Hanga^Piko ,„/ \ 



Punta 
Cuidado 



Hutuiti Cabo 

Roggeween 



Volcan 
Rano 
Kau 



Cabo Sur 

MotU'Nui 



Rada 
Benepu 

Matavert 
International 
Airport 



Punta 
Baja 



So* 



® 


National capital 


® 


Province capital 


• 


Populated place 




Road 




Track 


A 


Spot elevation 




in meters 




Stone statue 




(Moai) 


1 


2 3 Kilometers 


I L 




V h 1 

1 2 3 Miles 



500 1 ,000 Kilometers 




500 1,000Mifes 

Pacific Ocean 

Is la Sat a tsta San Ambrosfo 
y Gomez (ChUe) / y 

° (Chile) tsla San F&Tx > 
Easter island < CbHe > ff 
(Chile) U £ 



tslas Juan Fernandez 

(Chile) 



Santiago 

MM 



MM 



Figure 5. Easter Island (Isla de Pascua), 1986 



unparalleled beauty, with an incredible variety that has fascinated 
visitors since the Spanish conquest. Because Chile extends from 
a point about 625 kilometers north of the Tropic of Capricorn to 
a point hardly more than 1,400 kilometers north of the Antarctic 
Circle, within its territory can be found a broad selection of the 
earth's climates. For this reason, geographically it is possible to 



68 



A monolith (Moai) 
on Easter Island 
Courtesy Embassy of 
Chile, Washington 




speak of several Chiles. The country usually is divided by geog- 
raphers into five regions: the far north, the near north, central Chile, 
the south, and the far south. Each has its own characteristic vege- 
tation, fauna, climate, and, despite the omnipresence of both the 
Andes and the Pacific, its own distinct topography. 

The Far North 

The far north (Norte Grande), which extends from the Peruvian 
border to about 27°south latitude, a line roughly paralleled by the 
Rio Copiapo, is extremely arid. It contains the Atacama Desert, 
one of the driest areas in the world; in certain sections, this desert 
does not register any rainfall at all. Average monthly temperatures 
range at sea level between about 20.5°C during the summer and 
about 14°C during the winter. Most of the population lives in the 
coastal area, where the temperatures are more moderate and the 
humidity higher. Contrary to the image of monochrome barren- 
ness that most people associate with deserts, the landscape is spec- 
tacular, with its crisscrossing hills and mountains of all shapes and 
sizes, each with a unique color and hue depending on its mineral 
composition, its distance from the observer, and the time of day. 

In the far north, the land generally rises vertically from the ocean, 
sometimes to elevations well over 1,000 meters. The Cordillera 
Domeyko in the north runs along the coast parallel to the Andes. 
This topography generates coastal microclimates because the fog 



69 



Chile: A Country Study 

that frequently forms over the cold ocean waters, as well as any 
low clouds, is trapped by the high bluffs. This airborne moisture 
condenses in the spines and leaves of the vegetation, droplets that 
fall to the ground and irrigate the plants' roots. Beyond the coastal 
bluffs, there is an area of rolling hills that encompasses the driest 
desert land; this area ends to the east with the Andes towering over 
it. The edges of the desert in some sections have subterranean 
aquifers that have permitted the development of forests made up 
mainly of tamarugos, spiny trees native to the area that grow to a 
height of about twenty-five meters. Most of those forests were cut 
down to fuel the fires of the many foundries established since colonial 
times to exploit the abundant deposits of copper, silver, and ni- 
trate found in the area. The result was the creation of even drier 
surface conditions. 

The far north is the only part of the country in which there is 
a large section of the Andean plateau. The area receives consider- 
able rainfall during the summer months in what is commonly known 
as the "Bolivian winter," forming shallow lakes of mostly saline 
waters that are home to a number of bird species, including the 
Chilean flamingo. Some of the water from the plateau trickles down 
the Andes in the form of narrow rivers, many of which form oases 
before being lost to evaporation or absorption into the desert sands, 
salt beds, and aquifers. However, some rivers do manage to reach 
the Pacific, including the Rio Loa, whose U-shaped course across 
the desert makes it Chile's longest river. The water rights for one 
of the rivers, the Rio Lauca, remain a source of dispute between 
Bolivia and Chile. These narrow rivers have carved fertile valleys 
in which an exuberant vegetation creates a stark contrast to the 
bone-dry hills. In such areas, roads usually are built halfway up 
the arid elevations in order to maximize the intensive agricultural 
use of the irrigated land. They offer spectacular panoramic vistas, 
along with the harrowing experience of driving along the edges of 
cliffs. 

In the far north, the kinds of fruits that grow well in the arid 
tropics thrive, and all kinds of vegetables can be grown year-round. 
However, the region's main economic foundation is its great miner- 
al wealth. For instance, Chuquicamata, the world's largest open- 
pit copper mine, is located in the far north. Since the early 1970s, 
the fishing industry has also developed enormously in the main 
ports of the area, most notably Iquique and Antofagasta (see The 
Current Structure of the Economy, ch. 3). 

The Near North 

The near north (Norte Chico) extends from the Rio Copiapo 



70 



The Society and Its Environment 



to about 32°south latitude, or just north of Santiago. It is a semiarid 
region whose central area receives an average of about twenty-five 
millimeters of rain during each of the four winter months, with 
trace amounts the rest of the year. The near north is also subject to 
droughts. The temperatures are moderate, with an average of 
18.5°C during the summer and about 12°C during the winter at 
sea level. The winter rains and the melting of the snow that accumu- 
lates on the Andes produce rivers whose flow varies with the seasons, 
but which carry water year round. Their deep transverse valleys 
provide broad areas for cattle raising and, most important, fruit 
growing, an activity that has developed greatly since the mid-1970s. 

As in the far north, the coastal areas of the near north have a 
distinct microclimate. In those sections where the airborne moisture 
of the sea is trapped by high bluffs overlooking the ocean, temper- 
ate rain forests develop as the vegetation precipitates the vapor in 
the form of a misty rain. Because the river valleys provide breaks 
in the coastal elevations, maritime moisture can penetrate inland 
and further decrease the generally arid climate in those valleys. 
The higher elevations in the interior sections are covered with shrubs 
and cacti of various kinds. 

Central Chile 

Central Chile (Chile Central), home to a majority of the popu- 
lation, includes the three largest metropolitan areas — Santiago, Val- 
paraiso, and Concepcion. It extends from about 32°south latitude 
to about 38°south latitude. The climate is of the temperate Mediter- 
ranean type, with the amount of rainfall increasing considerably 
and progressively from north to south. In the Santiago area, the 
average monthly temperatures are about 19.5°C in the summer 
months of January and February and 7.5°C in the winter months 
of June and July. The average monthly precipitation is no more 
than a trace in January and February and 69.7 millimeters in June 
and July. By contrast, in Concepcion the average monthly tem- 
peratures are somewhat lower in the summer at 17.6°C but higher 
in the winter at 9.3°C, and the amount of rain is much greater. 
In the summer, Concepcion receives an average of twenty mil- 
limeters of rain per month; in June and July, the city is pounded 
by an average of 253 millimeters per month. The numerous rivers 
greatly increase their flow as a result of the winter rains and the 
spring melting of the Andean snows, and they contract considera- 
bly in the summer. The combination of abundant snow in the Andes 
and relatively moderate winter temperatures creates excellent con- 
ditions for Alpine skiing. 



71 



Chile: A Country Study 

The topography of central Chile includes a coastal range of moun- 
tains running parallel to the Andes. Lying between the two moun- 
tain ranges is the so-called Central Valley, which contains some 
of the richest agricultural land in the country, especially in its north- 
ern portion. The area just north and south of Santiago is a large 
producer of fruits, including the grapes from which the best Chilean 
wines are made. Exports of fresh fruit began to rise dramatically 
in the mid-1970s because Chilean growers had the advantage of 
being able to reach markets in the Northern Hemisphere during 
that part of the world's winter. Most of these exports, such as 
grapes, apples, and peaches, go by refrigerator ships, but some, 
such as berries, go by air freight. 

The southern portion of central Chile contains a mixture of some 
excellent agricultural lands, many of which were covered originally 
with old-growth forests. They were cleared for agriculture but were 
soon exhausted of their organic matter and left to erode. Large tracts 
of this worn-out land, many of them on hilly terrain, have been 
reforested for the lumber, especially for the cellulose and paper in- 
dustries. New investments during the 1980s in these industries trans- 
formed the rural economy of the region. The pre- Andean highlands 
and some of the taller and more massive mountains in the coastal 
range (principally the Cordillera de Nahuelbuta) still contain large 
tracts of old- growth forests of remarkable beauty, some of which 
have been set aside as national parks. Between the coastal moun- 
tains and the ocean, many areas of central Chile contain stretches 
of land that are lower than the Central Valley and are generally 
quite flat. The longest beaches can be found in such sections. 

The South 

Although many lovely lakes can be found in the Andean and 
coastal regions of central Chile, the south (Sur de Chile) is definitely 
the country's most lacustrine area. Southern Chile stretches from 
below the Rio Bio-Bio at about 38° south latitude to below Isla de 
Chiloe at about 43.4°south latitude. In this lake district of Chile, 
the valley between the Andes and the coastal range is closer to sea 
level, and the hundreds of rivers that descend from the Andes form 
lakes, some quite large, as they reach the lower elevations. They 
drain into the ocean through other rivers, some of which (princi- 
pally the Rio Calle Calle, which flows by the city of Valdivia) are 
the only ones in the whole country that are navigable for any stretch. 
The Central Valley's southernmost portion is submerged in the 
ocean and forms the Golfo de Ancud. Isla de Chiloe, with its rolling 
hills, is the last important elevation of the coastal range of mountains. 

The south is one of the rainiest areas in the world. One of the 
wettest spots in the region is Valdivia, with an annual rainfall of 



72 



Volcdn Osorno, Chile's most perfectly shaped volcano, overlooking nearby 
Lago Llanquihue, and a Lutheran church, representative of the 
strong German influence in the region 
Courtesy Ramon Mir 6 
A lake near Coihaique in southern Chile 
Courtesy Inter-American Development Bank 



73 



Chile: A Country Study 



2,535.4 millimeters. The summer months of January and Febru- 
ary are the driest, with a monthly average precipitation of sixty- 
seven millimeters. The winter months of June and July each 
produce on average a deluge of 410.6 millimeters. Temperatures 
in the area are moderate. In Valdivia the two summer months aver- 
age 16.7°C, whereas the winter months average 7.9°C. 

The lakes in this region are remarkably beautiful. The snow- 
covered Andes form a constant backdrop to vistas of clear blue or 
even turquoise waters, as at Lago Todos los Santos. The rivers 
that descend from the Andes rush over volcanic rocks, forming 
numerous white- water sections and waterfalls. The vegetation, in- 
cluding many ferns in the shady areas, is a lush green. Some sec- 
tions still consist of old-growth forests, and in all seasons, but 
especially in the spring and summer, there are plenty of wildflow- 
ers and flowering trees. The pastures in the northernmost section, 
around Osorno, are well suited for raising cattle; milk, cheese, and 
butter are important products of that area. All kinds of berries grow 
in the area, some of which are exported, and freshwater farming 
of various species of trout and salmon has developed, with cultiva- 
tors taking advantage of the abundant supply of clear running water. 
The lumber industry is also important. A number of tourists, mainly 
Chileans and Argentines, visit the area during the summer. 

Many of Chile's distinctive animal species have been decimated 
as they have been pushed farther and farther into the remaining 
wilderness areas by human occupation of the land. This is the case 
with the huemul, a large deer, and the Chilean condor, the largest 
bird of its kind; both animals are on the national coat of arms. The 
remaining Chilean pumas, which are bigger than their California 
cousins, have been driven to isolated national parks in the south 
by farmers who continue to hunt them because they occasionally 
kill sheep and goats. 

The Far South 

In the far south (Chile Austral), which extends from between 
43°south latitude and 44°south latitude to Cape Horn, the Andes 
and the South Pacific meet. The continental coastline features 
numerous inlets and fjords, from which the mountains seem to rise 
straight up to great elevations; this is, for example, the case with 
the Cerro Maca (2,960 meters) near Puerto Aisen. The rest of the 
land consists of literally thousands of islands forming numerous 
archipelagos interwoven with sometimes-narrow channels, which 
provide the main routes of navigation. 

In the northern part of the far south, there is still plenty of rain- 
fall. For instance, Puerto Aisen, at 45°24' south latitude, receives 



74 



The Society and Its Environment 



2,973.3 millimeters of rain per year. However, unlike in Valdivia, 
the rain falls more or less evenly throughout the year in Puerto 
Aisen. The summer months average 206.1 millimeters, whereas 
the winter months average 300 millimeters. The temperatures at 
sea level in Puerto Aisen average 13.6°C in the summer months 
and 4.7°C in the winter months. Although the area generally is 
chilly and wet, the combination of channels, fjords, snowcapped 
mountains, and islands of all shapes and sizes within such a nar- 
row space makes for breathtaking views. The area is still heavily 
forested, although some of the native species of trees that grow in 
the central and southern parts of the country have given way to 
others better adapted to a generally colder climate. 

The southern part of the far south includes the city of Punta Are- 
nas, which, with about 125,000 inhabitants, is the southernmost 
city of any appreciable size in the world. It receives much less 
precipitation; its annual total is only 438.5 millimeters, or a little 
more than what Valdivia receives in the month of June alone. This 
precipitation is distributed more or less evenly throughout the year, 
with the two main summer months receiving a monthly average 
of thirty-one millimeters and the winter months 38.9 millimeters, 
some of it in the form of snow. Temperatures are colder than in 
the rest of the country. The summer months average 1 1 . 1 °C, and 
the winter months average 2.5°C. The virtually constant wind from 
the South Pacific Ocean makes the air feel much colder. 

The far south contains large expanses of pastures that are best 
suited for raising sheep. The area's other main economic activity 
is oil and natural gas extraction from the areas around the Strait 
of Magellan. This strait is one of the world's important sea-lanes 
because it unites the Atlantic and Pacific oceans through a chan- 
nel that avoids the rough open waters off Cape Horn. The chan- 
nel is perilous, however, and Chilean pilots guide all vessels through 
it. 

The People 

Formation of the Chilean People 

To a traveler arriving in Santiago from Lima, Chileans will in 
general seem more Latin European-looking than Peruvians. By 
contrast, to a visitor arriving from Buenos Aires, certain native 
American features will seem apparent in large numbers of Chileans 
in contrast to Argentines. These differing perspectives can be 
explained by tracing the distinctive historical roots of the Chil- 
ean people. 



75 




76 



Paine (Paine Horns) and Lago Pehoe in Torres del Paine 
(Paine Towers) National Park, Chilean Patagonia 
Courtesy Ramon Miro and Laura Mullahy 



77 



Chile: A Country Study 



The Spaniards who settled in the pleasant Central Valley of what 
is now Chile beginning in the late sixteenth century found no rich 
lodes of gold or silver to exploit, and therefore saw no need for 
employing masses of indigenous forced laborers such as those who 
were put to work in the Andean highlands and in the mines of Mex- 
ico. Although copper mining became an important part of the late 
colonial economy, even the most successful of operations employed 
no more than a few salaried workers. Settlers took to developing 
the agricultural potential of the land, which, given Chile's climate, 
was well suited for growing the crops they knew from the Old 
World. This seasonal form of farming was different from that prac- 
ticed in semitropical plantations in that it required few workers ex- 
cept during the harvest. As a result, the Spanish settlers in Chile 
did not seek to force large numbers of native Americans to toil for 
them, and they had little use for slaves. Relatively few enslaved 
Africans were brought into Chile, and slavery was abolished soon 
after the country gained its independence from Spain in 1818. 

The Spaniards encountered fierce resistance to their occupation 
efforts from one of the main indigenous groups, the Araucanians, 
who lived in the south-central part of the country. The settlers 
managed to take control of the land down to the Rio Bio-Bio and 
to establish strongholds farther south, but throughout the colonial 
period the area that is now Chile consisted of two distinct nations: 
one a poor outpost of the Spanish Empire and the other an indepen- 
dent territory, Arauco, occupied by the Araucanians, whose terri- 
tory consisted of most of south-central Chile between the Rio 
Bio-Bio and the coastal areas around Temuco. By the end of the 
colonial period, the Araucanian territories had been reduced, but 
they had not been fully incorporated into Spanish rule. The in- 
digenous wars lasted for more than three centuries, with a final 
skirmish in 1882. 

Although warfare and the diseases brought by the Spaniards deci- 
mated the native population, Spain found it necessary to keep send- 
ing soldiers to protect its distant colony. They came from all regions 
of Spain, including the Basque country, and many of them ended 
up settling in Chile. The combination of an economy based on 
temperate-zone agriculture, native American resistance to Span- 
ish occupation, and a continuous influx of Spaniards from the mid- 
sixteenth century to the end of the colonial period defined the main 
body of the Chilean population — a mixture of native American and 
Spanish blood, but one in which the Spanish element is greater 
than in the other Andean mestizo populations. 

During the nineteenth century, the newly independent govern- 
ment sought to stimulate European immigration. Beginning in 



78 



The Society and Its Environment 



1 845 , it had some success in attracting primarily German migrants 
to the Chilean south, principally to the lake district. For this rea- 
son, that area of the country still shows a German influence in its 
architecture and cuisine, and German (peppered with archaic ex- 
pressions and intonations) is still spoken by some descendants of 
these migrants. People from England and Scotland also came to 
Chile, and some established export-import businesses of the kind 
that the Spanish crown previously had kept at bay. Other European 
immigrants, especially northern Italians, French, Swiss, and Croats, 
came at the end of the nineteenth century. More Spaniards and 
Italians, East European Jews, and mainly Christian Lebanese, 
Palestinians, and Syrians came in the decades before World War 
II. Many of ihese immigrants became prominent entrepreneurs 
or professionals, but their numbers never exceeded 10 percent of 
the total population at any given time. Thus, in contrast to Ar- 
gentina, whose population was transformed around the turn of the 
century by numerous European immigrants, especially Italians, 
the Chilean population continued to be defined by the original Span- 
ish and native American mixture. Acculturation was fairly rapid 
for all immigrant groups. Because second- generation residents saw 
themselves primarily as Chileans, ethnic identities had little im- 
pact on national society. 

Chileans of all color gradations between the fair northern Euro- 
pean and the darker native American complexion can be found, 
although most have brown hair or dark brown hair and brown eyes. 
There have been no really salient racial distinctions affecting daily 
life and politics in Chile, but there is unquestionably a strong corre- 
lation between high socioeconomic status and light skin. 

The social definition of who is a native has not depended so much 
on phenotypical characteristics as on cultural ones. This means that 
Chileans generally have considered someone to be a native only 
if, in addition to native American features, he or she has an in- 
digenous last name, wears native clothing, speaks a native language, 
or resides in a native community. Consequently, the native Ameri- 
cans who wish to assimilate fully into Chilean society often take 
Spanish surnames after moving off reservations. 

The term Mapuche ("people of the land") now encompasses 
most of the native Chilean groups. The number of Mapuche resid- 
ing on the reservations that were set up beginning in the late 1880s 
has declined in recent years. About 300,000 were counted as liv- 
ing on the reservations by the 1982 census. The 1992 census asked 
respondents to identify themselves ethnically as Mapuche, Aymara 
(the native population of northern Chile whose main trunk lies in 
Bolivia), Rapa Nui (the Polynesian group that lives in or originates 



79 



Chile: A Country Study 



from Easter Island), and other. The results showed that 9.6 per- 
cent of the population over age fourteen self- identified as Mapuche, 
0.5 percent as Aymara, and less than 0.25 percent as Rapa Nui 
(see table 2, Appendix). This means that about 1.3 million Chileans 
are native Americans, mainly Mapuche, or the descendants of one 
of the fourteen or so different tribal groups that occupied what is 
now Chile before the Spanish conquest. 

Although indigenous culture was most strongly retained on the 
reservations, penetration by Chilean national culture was also ex- 
tensive. For example, research on a sample of Mapuche living on 
four reservations in the south showed that only 8.5 percent of them 
were monolingual Mapuche (sometimes called Mapudungu) speak- 
ers; 50.7 percent lived in homes where both Spanish and Mapuche 
were spoken, and 40.8 percent lived in homes where only Spanish 
was spoken. This situation was largely a result of the extension of 
primary rural education. Of all Mapuche over fifteen years of age 
living on the same reservations that were studied, 81 percent had 
gone to school for at least one year (85.5 percent of the men and 
76.2 percent of the women). Significant differences in schooling 
by age among the Mapuche reveal how wide the reach of rural 
education has been in recent years. In the sampled reservation com- 
munities, the literacy rate was 81.2 percent for all residents over 
five years of age, and yet the rate was more than 96.2 percent for 
the age- group between ages ten and thirty-four. The acquisition 
of language and literacy skills is, of course, a principal means of 
acculturation. 

With the partial exception of the indigenous groups, the Chilean 
population perceives itself as essentially homogeneous. Despite the 
configuration of the national territory, regional differences and sen- 
timents are remarkably muted. Even the Spanish accent of Chileans 
varies only very slightly from north to south; more noticeable are 
the small differences in accent based on social class or whether one 
lives in the city or the country. The fact that the Chilean popula- 
tion essentially was formed in a relatively small section of the center 
of the country and then migrated in modest numbers to the north 
and south helps explain this relative lack of differentiation, which 
is now maintained by the national reach of radio and especially 
of television. The media diffuse and homogenize colloquial ex- 
pressions. 

Current Demographic Profile 

A new decennial census was taken in 1992. Some of its data were 
already available officially as of this writing, but other data were 
still in the process of being tabulated. The total population was 



80 



The Society and Its Environment 



officially given as 13,348,401, of whom 6,553,254 were males and 
6,795,147 were females (see table 3, Appendix). According to the 
data, the average population density in 1992 remained 17.6 in- 
habitants per square kilometer. Population density varied greatly, 
however, from the sparsely populated far north and far south to 
the much more densely inhabited central Chile (see table 4, Ap- 
pendix). In 1993 the figure rose to eighteen inhabitants per square 
kilometer. The new total population figure shows that the growth 
of the population in the ten years between the 1982 and the 1992 
censuses was about 1.7 percent per annum. 

The National Statistics Institute (Instituto Nacional de Estadfsti- 
cas— INE) estimated the birthrate in 1991 at 22.4 per 1 ,000 popu- 
lation, an increase over 1985, when the rate stood at 21 .6 per 1 ,000. 
This has led to a corresponding widening of the base of the age 
pyramid of the population, which had narrowed significantly with 
the decline in the birthrate that began in the mid- to late 1960s 
(see fig. 6). The current increase in the birthrate is a slight demo- 
graphic echo of the birth control programs that began in the 
mid-1960s. These programs reduced the fertility of women of child- 
bearing age, causing the original drop in the birthrate, whereas 
the rise in the early 1990s resulted from children born to new 
generations of women who had reached the childbearing period 
of their lives. Whereas women of childbearing age (fourteen to forty- 
nine years) had had an average of 4.09 children in 1967, by 1992 
this average had dropped to 2.39. 

With the declining birthrate and no significant increase in im- 
migration, much of the growth in the Chilean population over the 
1970s and 1980s resulted from a decline in mortality. The mortality 
rate in 1992 was estimated at 5.6 per 1,000 population, whereas 
in 1960 it had been more than twice that, at 12.5 per 1,000. In 
1990 life expectancy at birth was estimated at 71.0 years (sixty- 
eight for men and seventy-five for women), up from the 1960 figure 
of 5 7 . 1 years (57.6 for men and 63.7 for women) . These improve- 
ments resulted in part from better health care beyond the first year 
of life, but they are explained primarily by a dramatic decline in 
infant mortality during the 1960-90 period. In 1960 infant mor- 
tality was 119.5 per 1,000 live births, and by 1991 it had declined 
to 14.6 per 1,000. This latter rate, one of the lowest in Latin Ameri- 
ca, indicated the success of the various health programs for expec- 
tant mothers and infants implemented since the late 1960s. In the 
early 1990s, the Chilean population was older than it had been in 
the 1960s. The 1982 census revealed for the first time ever that 
the population included a majority of adults over twenty-one years 
of age. Yet it was still a very young population: 49 percent of 



81 



Chile: A Country Study 



AGE-GROUP 

80 and over 
75—79 
70—74 
65—69 
60—64 
55—59 
50—54 
45—49 
40—44 
35—39 
30—34 
25—29 
20—24 
15—19 
10—14 
5—9 
0—4 



Total Population in 1991=13,385,805 



MALES 



FEMALES 



4 2 2 4 

PERCENTAGE OF POPULATION 



Source: Based on information from Chile, Instituto Nacional de Estadfsticas, Compendio 
estadistico, 1991, Santiago, 1991, 12. 



Figure 6. Estimated Population by Age and Gender, 1991 

Chileans were estimated in 1991 to be less than twenty-four years 
of age. 

Urban Areas 

Since the 1930s, the majority of Chileans have lived in urban 
areas (defined as agglomerations of more than 2,000 inhabitants). 
This reflects a demographic trend of migration from rural areas 
that began early, according to developing world and Latin Ameri- 
can standards. The urban population was estimated to be 86 percent 
of the total in 1991. A perhaps better indicator of the degree of 
urbanization of a country is the extent to which the population lives 
in agglomerations of more than 20,000. According to the 1982 cen- 
sus, there were fifty-one cities and towns in Chile with more than 
20,000 inhabitants, and their combined population represented 65.6 



82 



The Society and Its Environment 



percent of the total. This percentage shows that Chile is very 
definitely an urban country. There has continued to be a signifi- 
cant internal migration of the population, although mostly from 
one urban center to another. The 1982 census showed that a sig- 
nificant 8.6 percent of the population had moved to the province 
of current residence during the previous five years. 

Central Chile is the site of the oldest urban centers, many of 
which were founded by the Spanish in the mid-sixteenth century. 
Most of the older cities are next to rivers in areas of rich soil. San- 
tiago, founded in 1541, is typical of this pattern of settlement in 
a prime agricultural area. Little did its founders know that city 
streets and houses would occupy so much of the Santiago Valley's 
fertile soil in the twentieth century. Santiago was designated from 
its founding as the capital city of the new colony, and it has been 
the seat of the Chilean government ever since. Other cities, such 
as Valparaiso, founded in 1536, served as ports. The city of 
Concepcion — founded in 1550 in what is now Penco and moved 
a bit inland to its present location in 1754 — served as the center 
of a wheat-growing area, as a port for the southern part of the Cen- 
tral Valley, and as a military base on the Araucanian frontier. 

Despite being continually populated for more than four centu- 
ries, Chilean cities have — unlike Lima or Cartagena, for instance — 
few architectural monuments from the past. This is explained in 
part by the poverty of the country in colonial times but also by 
the devastating action of the frequent earthquakes. Following the 
usual Spanish colonial practice, Chilean cities were planned with 
a central plaza surrounded by a grid of streets forming square 
blocks. The plazas invariably were the site of both municipal or 
regional government buildings and churches. 

Communications between urban centers were facilitated during 
the colonial period by the relative proximity to the ocean of even 
the most Andean of locations. Except for cities in the Central Val- 
ley, between Santiago and Chilian, ocean transportation and ship- 
ping were vital to the north-south movement of people and goods 
until the building of railroads from the second half of the nineteenth 
century until the first decades of the twentieth century. Even then, 
the railroads only served the central and southern parts of the coun- 
try to Puerto Montt, leaving sea-lanes as the main links to the ex- 
treme north and south. 

The most significant feature of the development of urban centers 
in Chile has been the imbalance represented by the growth of San- 
tiago, which has far exceeded that of other cities. According to the 
1992 census figures, the Metropolitan Region of Santiago had about 
5,170,300 inhabitants, a total equal to about 39 percent of the 



83 



Chile: A Country Study 

Chilean population. In 1865, with a population of about 115,400, 
Santiago was the residence of only 6.3 percent of the nation's in- 
habitants. From about 1885 onward, the capital city grew at a rate 
between about 30 percent and 50 percent every ten to twelve years 
(see table 5, Appendix). The 1992 census figure showed a slight 
moderation of this pace, which was, nonetheless, at 3.3 percent 
per year significantly higher than the average national population 
increase. 

Santiago's population growth occurred mainly as a result of 
migration from rural areas and provincial urban centers. Almost 
30 percent of the population of the capital in 1970 had been born 
in areas of Chile other than Santiago, a percentage that has prob- 
ably not changed much since. The only other areas of the country 
that have greatly increased their population in recent years are the 
extreme south and the extreme north. This growth has resulted 
from internal migration prompted by economic expansion associat- 
ed with fishing and mining. However, given the much smaller popu- 
lations in those areas to begin with, the fact that between 30 percent 
and 40 percent of their inhabitants were born elsewhere does not 
signify much in terms of the absolute numbers of people migrating. 

Santiago is not only the seat of the national government (except 
for the National Congress, hereafter Congress, now located in Val- 
paraiso) but also the nation's main financial and commercial center, 
the most important location for educational, cultural, and scien- 
tific institutions, and the leading city for manufacturing in terms 
of the total volume of production. Although sprawling Santiago 
has continued to absorb formerly prime agricultural areas, there 
are sections of town where wineries still cultivate grapes. 

Historically, Santiago has been the main area of residence for 
the nation's wealthiest citizens, even for those with property else- 
where in the country. Unlike other Chilean cities, Santiago has 
always had an extensive upper- and upper-middle-class residen- 
tial area. Originally near the main plaza in the center of town, this 
area developed toward the south and west at the end of the 
nineteenth century and the beginning of the twentieth century. 
Although neighborhoods in these areas retain some samples of the 
architecture of that period, by the 1990s they were occupied mainly 
by lower-middle-class residents. Beginning in the 1930s, Santia- 
go's upper-class residents moved east of the center of town, toward 
the Andes. This transition was accompanied by an increase in the 
commercial use of downtown as larger and larger buildings were 
constructed and the public transportation system was enhanced. 
As use of the automobile became more common, the upper-class 
and upper-middle-class residential areas expanded farther up 



84 



A view from San Cristobal Hill, Santiago 
Courtesy Embassy of Chile, Washington 
Children returning from school in the town of Cochamo, located 
on the Seno Reloncavi in southern Chile 
Courtesy Inter-American Development Bank 



85 



Chile: A Country Study 

the foothills of the Andes. This process of suburbanization, com- 
plete with shopping mails and supermarkets with large parking lots, 
also has led to the development of new and faster roads to the center 
of the city and to the principal airport. New bus lines also were 
established to serve the suburbs. All of this has increased motor- 
vehicle traffic in the Santiago Valley, whose surrounding moun- 
tains trap particulate matter, generating levels of air pollution that 
are among the worst in the world. In the early 1990s, emergency 
restrictions on the use of motor vehicles became a routine feature 
of the city's life during all but the summer months, when there 
is more wind and the thermal inversion that traps the dirty air in 
the colder months no longer prevents its venting. 

The large number of people migrating to Santiago and, to a lesser 
extent, to other major cities has led to a severe shortage of housing, 
especially of affordable housing for low-income people. Estimates 
in 1 990 were that the nation as a whole needed a million more hous- 
ing units to accommodate all those living in crowded conditions 
with relatives or friends, those with housing in poor condition, or 
those living in emergency housing. Since the 1960s, extensive por- 
tions of the Santiago area, especially to the south, east, and north 
of the center have been occupied by people who built precarious 
makeshift housing on lots that were often used illegally. As these 
areas aged, the municipal authorities extended city services to them 
and tried to redesign, where need be, their haphazard layout. 
Moreover, many people — about 28,000 between 1979 and 1984 — 
were moved out of illegal settlements by the authorities and into 
low-income housing. The result was a further expansion of urbani- 
zation and an increase in the distances that people had to travel 
to work, look for work, or attend school. Nonetheless, by 1990 vir- 
tually all of the poorer areas of Santiago had access to electricity, 
running water, refuse collection, and sewerage. In fact, the coun- 
try's urban population as a whole had good access to city services. 
By 1987, 98 percent of the population in towns and cities had run- 
ning water (the great majority in their homes), 98 percent had gar- 
bage collection, and 79 percent had sewer connections. 

The segregation within Chilean cities by income level has made 
residential areas very different from one another. In Santiago, where 
the differences are more sharply drawn than elsewhere, some neigh- 
borhoods are worlds apart. The upper-class areas in the eastern 
foothills of the Andes offer comfortable houses with neat, fenced- 
in gardens, or spacious apartments in sometimes attractively 
designed buildings, all on tree-lined streets. Restaurants, super- 
markets, shopping malls, boutiques, bookstores, cinemas, and the- 
aters add to the appeal of what is a very comfortable urban life. The 



86 



The Society and Its Environment 

area is well connected by public transportation, including the major 
east-west line of an excellent subway and its feeder buses. The best 
hospitals and clinics are within easy reach, as are the best private 
schools. 

The poor areas of the city are not as well served. There are few 
supermarkets, and the usually poorly stocked corner groceries often 
sell their goods at higher prices. Some streets are not paved, and 
this, together with the lack of grass cover in the open spaces, cre- 
ates dusty conditions during much of the year. Trees have been 
planted extensively in Santiago's poorer areas since the 1960s, but 
many streets are still devoid of them. Getting to the city center 
and to clinics and hospitals is more difficult for residents of the poor- 
er areas. However, access to preprimary schooling and to sport 
facilities, especially to soccer fields, has expanded significantly since 
the early 1970s. Except for some very plain-looking buildings with 
apartments for low-income families, most housing consists of one 
floor. The poorest houses are made of a variety of materials, in- 
cluding pine boards and cardboard. Houses are generally built with 
brick and poured-concrete braces, and most poor people eventu- 
ally try to build with such materials as well. As communities be- 
gun by land- squatters have become more settled, it has been possible 
to see the gradual transformation of squatter construction. 

Chilean cities commonly contain relatively large housing develop- 
ments (poblaciones), including multifamily units, single-family units, 
or a combination of the two. Many of these developments were 
constructed with loans made available to enterprises, pension funds, 
or savings and loan associations by the state for their employees 
or affiliates, usually at subsidized rates (especially before the mili- 
tary government). Consequently, they are often occupied by peo- 
ple who have the same place of employment or who belong to a 
specific occupational category. Such housing would not be avail- 
able as easily to large numbers of people were it not for the special 
financial arrangements worked out for the group. Transportation 
to and from work is often arranged by employers. One unintend- 
ed consequence of this pattern of urbanization is that it contrib- 
utes to the overall segregation of housing in Chile by income level 
or occupation. 

However, in part because of this pattern, Chile has a large 
proportion of homeowners. About 60 percent of housing units are 
owned by their occupants. As the housing developments age and 
many of the original occupants sell their houses and move else- 
where, the developments become more socially heterogeneous. Peo- 
ple also begin to modify and remodel their houses; and new corner 
groceries, hairstyling salons, tailor shops, schools, churches, and 



87 



Chile: A Country Study 



other establishments emerge, giving the developments a more set- 
tled, urban look. 

Because of a lack of jobs in the formal economy, many people 
need to make a living selling odds and ends on the streets. These 
people have not been counted as unemployed in official statistics 
because they are engaged in income-producing activities. During 
the military regime, the authorities attempted to organize this form 
of commerce by licensing stalls on the sidewalks of designated streets 
and by prohibiting sales elsewhere. However, there was greater 
demand for such stalls than there were available spaces, and they 
could not be erected in the most important commercial streets. 
Hence, many people defied the regulations and attempted to sell 
their goods where these activities were prohibited, risking confis- 
cation of their wares by the police. The Aylwin government con- 
tinued the policy in slightly modified form. 

Rural Areas 

Although mining, banking, and industry have been the source 
of the greatest Chilean fortunes since the early nineteenth century, 
rural society has occupied a much more central place in the na- 
tion's history. Until the 1930s, most of the population lived in rural 
areas, and most upper-class families, whatever the origin of their 
wealth, owned rural land. 

Until recently, large landholdings (latifundios — see Glossary) 
were a characteristic feature of rural society. The latifundia pattern 
of landownership originated in the Spanish crown's early colonial 
practice of giving land grants, some of them huge, to soldiers in- 
volved in the conquest and to the Roman Catholic Church. By the 
late eighteenth century, the most important lands of the Central 
Valley were held in large haciendas by families with noble titles 
that were all inherited by the elder son under the mayorazgo (see 
Glossary) system. All such titles were abolished with Chile's adop- 
tion of a republican form of government after independence, and 
new laws of inheritance eventually ended the practice of primogeni- 
ture. This led to the creation of a market for rural properties and 
to their division as they were inherited by family members. 
However, by the mid-twentieth century land transfers and divi- 
sions still had not put an end to ownership of large properties. 

The typical large landholding was a complex minisociety. Some 
of its laborers lived on the estate year-round, and they or their fam- 
ily members worked as needed in exchange for the right to culti- 
vate a portion of the land for themselves and to graze their animals 
in specified fields. Among the rural poor, their families enjoyed 
better living conditions. Other workers, a majority in times of strong 



88 



The Society and Its Environment 



demand for labor, especially during the harvest, lived in rural towns 
and villages or on small properties they held independently (whether 
legally or not) at the edges of the large farms. These holdings were 
usually insufficient to maintain a family adequately, and its mem- 
bers therefore would seek employment in the large rural enterprises. 
When needed, other rural workers were recruited from among 
migrants who would come during the summer from other parts 
of the country. The large rural enterprises included stores where 
people could buy a variety of goods, chapels where priests would 
say mass, and dispensaries for primary medical attention. In ad- 
dition to the sometimes ornate houses of the proprietors, which 
generally were occupied only during the summer months, there 
were houses for the administrators, mechanics, accountants, enolo- 
gists (if wine was produced), blacksmiths, and others who constituted 
the professional and skilled labor forces of the enterprise. 

Beginning in the 1950s, the large rural properties became the 
target of heightened criticism by reformist politicians and economists. 
They noted that the uneven distribution of land contributed to so- 
cial inequality and that the large landholdings were highly ineffi- 
cient agricultural producers. During the governments of presidents 
Eduardo Frei Montalva (1964-70), who established a reformed sec- 
tor (see Glossary), and Salvador Allende Gossens (1970-73), an 
extensive land reform program was carried out. It basically did 
away with the large rural properties on prime agricultural (non- 
forested) lands. Thus, whereas in 1965 fully 55 percent of all agricul- 
tural lands (measured as basic irrigated hectares — BIH) were held in 
4,876 properties of more than eighty hectares each, by 1973 there 
were only 260 such properties left, covering only 2.7 percent of all 
BIH. The expropriations covered 40 percent of all the nation's BIH. 

The military government put an end to the agrarian reform pro- 
gram, as well as to the technical assistance given to the beneficiaries 
of the expropriations. It also returned to previous owners some of 
the land that had not yet been formally transferred. In addition, 
it distributed individual titles among residents of the peasant com- 
munities sponsored by the Allende government's agrarian reform 
program. Moreover, the military government permitted the sale of 
any rural property, including the small family farms created by the 
agrarian reform. This policy led to new changes in land tenancy, 
which did not, however, reconstitute the large landholdings to the 
same extent as before the agrarian reform. Instead, it favored an ex- 
pansion of medium- sized holdings. After all the changes, very small 
holdings of fewer than five hectares still accounted for about 10 per- 
cent of the agricultural area. The largest holdings, of more than 
eighty hectares, were far from restored to their prior importance, 



89 



Chile: A Country Study 



at only 18 percent of the total area. If a primary purpose of the 
agrarian reform was to create a better distribution of the agricul- 
tural land, after much turmoil and change the data indicate that 
this had been achieved (see table 6, Appendix). 

The remarkable transformations in land tenancy that started in 
the mid-1960s were accompanied by other great changes in agricul- 
ture. These led to much more intensive land use, with the acceler- 
ated incorporation of modern technologies. Labor-service tenancy 
and share-cropping arrangements as a source of agricultural labor 
have disappeared from commercial farming, replaced by wage- 
earning workers living mainly in towns or small rural properties. 
The number of self-employed workers in agriculture has also in- 
creased with the land tenancy changes. 

The rural network of mainly dirt roads was expanded to permit 
access to new farms and logging areas. Concurrently, small-town 
entrepreneurs were quick to respond to new opportunities by es- 
tablishing bus routes along these expanded roads, thereby facilitat- 
ing the rural population's access to schools and sources of 
employment. By the 1980s, the peasantry was for the first time 
overwhelmingly literate, with attendance at primary schools by its 
children virtually universal (see Education, this ch.). 

The Labor Force and Income Levels 

With a lower rate of population growth, Chile's working-age 
population, which includes all those individuals more than fifteen 
and less than sixty-five years of age, represented 64 percent of the 
total population in 1992 (see table 7, Appendix). The labor force 
participation rate, or the ratio of those in the labor force over the 
working-age population, was 59 percent in August 1993; of the 
total population, 37 percent were employed or were seeking a job. 
Participation rates typically differ by age and gender. The young 
participate in smaller proportions and join the labor force as they 
leave the education system. Women have traditionally participated 
at lower rates also. The participation rate for men was estimated 
at 76 percent and that for women at 32 percent in 1992. These 
figures had increased since the early 1980s because of the relative 
aging of the overall population and a proportionately greater en- 
try of women into the labor force. In the 1980-85 period, 74 per- 
cent of men and 26 percent of women over fifteen years of age had 
been active in the work force. 

The rate of unemployment declined steadily throughout the 1987- 
91 period. The overall rate of growth in employment for the 1987-91 
period was 3 percent per year. The rate was higher from 1987 to 
1989 (5 percent), the period of fast recovery after the economic crisis 



90 



The Society and Its Environment 



of 1982-83. The most dynamic sectors during the 1987-89 period 
were construction and manufacturing, with average rates of em- 
ployment growth of 20 percent and 1 1 percent per year, respec- 
tively. Employment creation increased by 5 percent again in 1992, 
and by the end of the year unemployment stood at 4.4 percent. 
A greater than expected increase in the size of the labor force, mainly 
from women seeking employment, led to a slight increase in un- 
employment to 4.9 percent by late 1993. 

The largest single component of the Chilean employment struc- 
ture in 1991 was services, which include health workers, teachers, 
and government and domestic employees (see fig. 7; table 8, Ap- 
pendix). Next was trade and financial services, including the real 
estate, banking, and insurance industries. Together with transpor- 
tation and communications, these categories of the services sector 
of the economy employed 55.6 percent of the labor force. The most 
important of the productive activities in terms of employment was 
agriculture, forestry, and fishing, which employed 19.2 percent of 
the labor force. If mining is included, this means that 21.5 percent 
of the labor force was employed in what is typically considered the 
economy's primary sector. The manufacturing sector employed 16 
percent of the labor force, roughly the same percentage as in the 
mid-1960s; manufacturing's share had declined to about 12 per- 
cent during the economic crisis of 1982-83. Employment in what 
is often considered the secondary sector of the economy amounted 
to 23 percent, if the percentages engaged in construction and in 
electricity, gas, and water are added to that in manufacturing. 

In 1991 incomes had also almost recovered, for the first time 
in twenty years, to their 1970 average levels (see table 9, Appendix). 
During 1990 and the first months of 1991 , workers' wages increased 
more rapidly than the national average wage. This probably resulted 
in some measure from the return to democracy that had enabled 
workers to exercise their rights more freely and from labor market 
conditions closer to full employment. Real incomes continued to 
rise during 1992 and 1993, reaching levels that surpassed the previ- 
ous, but then unsustainable, peak established in 1971. 

Nonetheless, the monthly wages of Chileans are, when expressed 
in dollars, much lower than incomes in the United States (see table 
10, Appendix). According to these figures, which probably under- 
state high incomes and overstate lower ones, an unskilled worker 
makes less than one-tenth the amount an executive or an administra- 
tor-director makes. The purchasing power of these incomes for daily 
necessities is, however, higher than their dollar- denominated equiv- 
alents suggest. 



91 



Chile: A Country Study 



1991 LABOR FORCE = 4.7 MILLION 

Agriculture, forestry, and fishing 
19.2 % 




Trade and financial services 
22.2% 



Source: Based on information from Chile, Instituto Nacional de Estadisticas, Compendio 
estadistico, 1991, Santiago, 1991, Table 141-02. 

Figure 7. Employment by Sector, 1991 

During the military government, unemployment rose well above 
its historical levels for the Chilean economy. There were two dis- 
tinct shocks to the labor market. The first one took place around 
1975 and can be related to the recessionary conditions created by 
anti- inflationary policies and to employment reduction in the public 
sector. The adjustment that followed was very slow. The second 
shock took place with the financial and economic crisis of 1982-83 
and affected private-sector employment. From 1979 to 1981, the 
economy had entered into a recovery increasingly oriented toward 
production of nontradable goods, a pattern that was not sustain- 
able given the speed at which international debt was being accu- 
mulated. In response to the devaluation of the Chilean peso (see 
Glossary) in 1982 and the macroeconomic management that fol- 
lowed, the economy shifted gears and reoriented production to trad- 
able goods and services. In 1982 the unemployment rate for the 
country climbed to 19.4 percent, or 26.4 percent if those participat- 
ing in state-financed makeshift work programs are included. Yet 



92 



The Society and Its Environment 



the adjustment that followed took place at a faster pace. By 1986 
the unemployment rate totaled 13.9 percent. Chile's unemploy- 
ment rate returned in the early 1990s to levels that characterized 
the country in the 1960s (see table 11, Appendix). 

The distribution of personal income is quite regressive in Chile 
in general and Santiago in particular, a tendency that became more 
pronounced during the military government (see table 12, Appen- 
dix). The data reveal that personal income in Santiago is strongly 
concentrated in the highest decile, which enjoys about 40 percent 
of the total income. They also show that despite the great changes 
in the Chilean economy during this period, the distribution of per- 
sonal income remains rather stable, even though a somewhat greater 
concentration can be seen in 1989 than in previous years. The poli- 
cies on income and taxes of the Aylwin government helped to slight- 
ly reverse this trend (see Future Challenges of Democratic 
Consolidation, ch. 4). 

The distribution of consumption by household in Santiago 
showed a strong tendency toward the concentration of expendi- 
tures in the higher-income groups during the military government. 
The figures for the first two years of the Aylwin government show 
a small change in direction toward a more equitable distribution 
of consumption, although it is still significantly more concentrat- 
ed in the richest quintile than in 1969 (see table 13, Appendix). 
The data show that the richest quintile of households increased its 
consumption steadily from 1969 to 1989 but that it declined in 1990 
and 1991. Moreover, by 1991 the bottom two quintiles had in- 
creased their share of consumption slightly at the expense of the 
fourth quintile. Hence, the distribution of household consumption 
was a bit more equal in 1991 than in 1988. 

These results must be interpreted with caution. The distribu- 
tion of household incomes is affected by the average number of 
income earners by household income levels, and in times of eco- 
nomic crisis the poorer segments may be forced to rely on the in- 
come of fewer household members. This apparently happened in 
Chile in 1983, when there were only 1.1 income earners in the 
poorest 20 percent of families; in the 30 percent of families with 
middle- to lower-middle incomes, there were 1.4 income earners; 
in the 30 percent of households in the middle- to high-income group, 
there were 1.7 income earners; and in the top 20 percent, there 
were two income earners per household. Because their incomes 
were also higher, the concentration of consumption in the high- 
income families was greater. Similarly, the expansion of second- 
ary school enrollments during the 1980s benefited the children of 



93 



Chile: A Country Study 



poorer households, but it may have deprived them of the income 
derived from youth employment. 

Social Organizations and Associations 

Chileans have a remarkable facility for forming organizations 
and associations. This propensity perhaps has something to do with 
the fact that for more than three centuries both the Spanish-Chilean 
and the indigenous components of the country led a precarious life 
of conflict with each other, a situation that forced people to rely 
more than usual on collective organizing, especially, as was the 
case for both sides, given the weakness of the state. In contrast to 
North Americans, however, Chileans usually take a formal ap- 
proach to creating organizations. In addition to electing a presi- 
dent, a treasurer, a secretary, and perhaps a few officers, they prefer 
to discuss and approve a statement of purpose and some statutes. 
This is a ritual even for organizations that need not register legally, 
obtaining what is called a "juridical personality" that will enable 
them to open bank accounts and to buy and sell properties. It is 
not known for certain where and how this formalism originated; 
it perhaps could be traced back to the densely legalistic approach 
adopted by Spain toward the governance of its faraway colonies 
and to the legalism of Roman Catholic canonical law, which ap- 
plied to many aspects of society. Whatever grain of truth there is 
in these speculations, observers of Chilean society are rapidly struck 
by the density of its organizational life and the relatively high degree 
of continuity of its organizations and associations (see The Church, 
Business, Labor, and the Media, ch. 4). 

In any Chilean community of appreciable size can be found sports 
clubs, mothers' clubs, neighborhood associations, parent centers 
linked to schools, church-related organizations, youth groups, and 
cultural clubs, as well as Masonic lodges and Rotary and Lions' 
clubs. Virtually all of the nation's fire fighters are volunteers, with 
the exception of members of a few fire departments in the largest 
cities. Government statistics greatiy understate the number of com- 
munity organizations because they refer mainly to those having 
some contact with one or another state office. According to the offi- 
cial estimate for 1991, there were about 22,000 such organizations, 
the main ones being sports clubs (6,939), neighborhood councils 
(6,289), mothers' clubs (4,243), and parent centers (1,362). Govern- 
ment publications do not report membership figures for these or- 
ganizations. 

Most of the important urban areas in Chile also include a broad 
sample of the local chapters of a wide variety of occupational as- 
sociations. These include labor unions and federations, public 



94 



The votive temple of Maipu, 
also known as the Church 
of Our Lady Carmen, 
patroness of Chile 
Courtesy David Shelton 




employee and health worker organizations, business and employ- 
ers' associations, and professional societies of teachers, lawyers, 
doctors, engineers, dentists, nurses, social workers, and other oc- 
cupational groups. Membership in labor unions, which declined 
significantly under the military government, has been growing 
rapidly since the late 1980s, a change directiy related to the transi- 
tion to democracy. Affiliation with organizations recognized as un- 
ions in labor legislation was officially estimated in 1990 at 606,800, 
a 20 percent increase over 1989. That figure did not include in- 
dividuals affiliated with public employee associations (including 
health workers), who were estimated to number about 140,000, 
nor the members of the primary and secondary teachers' associa- 
tion, who numbered about 105,000. But these two groups usually 
have been closely tied to the labor movement through the national 
confederations of labor. Thus, about 19 percent of a total labor 
force of 4,459,600 was linked to unions or union-like associations 
in 1990. With the continuing increases in union affiliations, which 
are especially significant in rural areas, a conservative estimate is 
that the unionized population (in legal as well as de facto organi- 
zations) stood in 1992 at between 22 percent and 24 percent of the 
labor force. The most important union confederation, which encom- 
passes the great majority of the nation's unions and union-like or- 
ganizations, is the United Labor Confederation (Central Unica de 
Trabajadores — CUT). CUT is the heir to a line of top labor 



95 



Chile: A Country Study 

confederations that can be traced back through various reorgani- 
zations and name changes to at least 1936, and perhaps to 1917 
(see Unions and Labor Conflicts, ch. 3; Labor, ch. 4). 

There are numerous business and employer associations in Chile. 
Their total membership is about 190,000, although they collectively 
claim to speak for about 540,000 proprietors of businesses of all 
sizes. The most important business organization, the Business and 
Production Confederation (Confederacion de la Produccion y del 
Comercio — Coproco), encompasses some of the very oldest ongo- 
ing associations in Chile: the National Agricultural Association (So- 
ciedad Nacional de Agricultura — SNA), founded in 1838, groups 
the most important agricultural enterprises; the Central Chamber 
of Commerce (Camara Central de Comercio), founded in 1858, 
includes large wholesale and retail commercial enterprises; the Na- 
tional Association of Mining (Sociedad Nacional de Mineria), 
founded in 1883, affiliates the main private mining companies; the 
Industrial Development Association (Sociedad de Fomento Fabril — 
Sofofa), founded in 1883, organizes the principal manufacturing 
industries; the Association of Banks and Financial Institutions 
(Asociacion de Bancos e Instituciones Financieras), founded in 1943, 
is the main banking-industry group; and the Chilean Construc- 
tion Board (Camara Chilena de la Construccion), founded in 1951 , 
organizes construction companies. 

Another important confederation of business groups is the Council 
of Production, Transport, and Commerce (Consejo de Produccion, 
Transporte y Comercio). In contrast to Coproco, this organiza- 
tion groups primarily medium-sized to small businesses, includ- 
ing many self-employed individuals who do not hire nonfamily 
members on a regular basis. Its main components are the 120,000- 
member Trade Union Confederation of Business Retailers and 
Small Industry of Chile (Confederacion Gremial del Comercio 
Detallista y de la Pequena Industria de Chile), founded in 1938, 
and the 24,000-member Confederation of Truck Owners of Chile 
(Confederacion de Duefios de Camiones de Chile), founded in 
1953. 

Professional societies are also well established. The largest ones, 
aside from the teachers' organization noted previously, are those 
for lawyers (about 12,000 members), physicians (about 14,500), 
and engineers (about 11,500). Affiliation figures for most of the 
more than thirty professional societies were unavailable, but there 
are at least 100,000 members in such associations aside from 
teachers. If these figures are added to those for membership in busi- 
ness groups and unions, it appears that about a third of the labor 
force is involved in occupationally based associations. 



96 



The Society and Its Environment 



The organized groups of Chilean society have long played an 
important role in the nation's political life. The elections in some 
of them — for example, in major labor federations, among univer- 
sity students, or in the principal professional societies — usually have 
been examined carefully for clues to the strength of the various na- 
tional political parties Most of the nation's university and profes- 
sional institute students, totaling 153,100 in 1989, belong to student 
federations. The various associations also make their views known 
to state or congressional officials when issues of policy that affect 
them are debated. 

Some associations traditionally have been identified with par- 
ticular political parties. This was the case, to a greater or lesser 
extent, with Masons, fire fighters, and teachers' federations — the 
Radical Party (Partido Radical); union confederations — the par- 
ties of the left; employer associations — the parties of the right; and 
the Roman Catholic Church, as well as its related organizations — 
the Conservative Party (Partido Conservador), as well as, in recent 
decades, the Christian Democratic Party (Partido Democrata 
Cristiano — PDC). Many of the most militant party members have 
also been active in social organizations. In addition, party head- 
quarters in local communities often have served as meeting places 
for all kinds of activities. The Radical clubs of small towns in the 
central south are especially active, often sponsoring sports clubs 
as well as the formation of fire departments. 

Chilean social life also has definite subcultures, with the main 
lines of cleavage being proximity to or distance from the Roman 
Catholic Church and social class. The schools that parents select 
for their children closely reflect these subcultural divisions. The 
latter are also strongly mirrored in associational life, as Chileans 
tend to channel their sports and leisure activities into organizations 
within their subculture. Schools, churches, and unions contribute 
to this pattern by being foci for such organizing. In addition, there 
are some clubs and centers related to specific ethnicities, such as 
Arab, Italian, or Spanish clubs, even though, as noted previous- 
ly, such identities traditionally have been much less salient than 
religion and class. Occupational associations have been an impor- 
tant component of class and social status identities in Chilean so- 
ciety, with most of them affiliating people of like occupations 
regardless of their religious identities or preferences. Although this 
has helped diminish the significance of religiously based identities, 
the leadership divisions and conflicts within the nation's associa- 
tions can often be traced back to those subcultural differences. Peo- 
ple's political preferences follow the subcultural lines of cleavage 
as well in most cases. 



97 



Chile: A Country Study 

Social organizations did not fare well under the military govern- 
ment. Those that were perceived to be linked, however loosely, 
to the parties of the left were subjected to sometimes severe repres- 
sive measures. This was particularly the case with labor unions, 
whose activities were suspended for more than six years. They were 
only permitted to reorganize under new legislation beginning in 
1979. Moreover, most associations, including those of business 
groups, were hardly ever consulted on policy matters, and, in the 
absence of normal democratic channels for exerting influence, they 
found their opinions and petitions falling on deaf ears. Eventually, 
the most prominent social organizations joined in voicing their dis- 
content with the military government through what was called the 
Assembly of Civility (Asamblea de la Civilidad), and their efforts 
contributed to the defeat of President Augusto Pinochet Ugarte 
(1973-90) in the 1988 plebiscite. The only organizations that thrived 
under the military government were the women's aid and mothers' 
clubs, which were supported by government largesse and headed 
at the national level by Pinochet's wife, Lucia Hiriart. 

With the return to democracy, social organizations recovered 
the ability to pressure Congress and the national government. The 
new government opted for explicit solicitation of the opinions of 
important interest associations on some of the policies it was con- 
sidering. It also fostered negotiations between top labor and busi- 
ness leaders over issues such as labor law reforms, minimum wage 
and pension levels, and overall wage increases for public employees. 
These negotiations led to several national agreements between state 
officials and business and labor leaders, thereby inaugurating a new 
form of top-level bargaining previously unknown in Chile. 

Welfare Institutions and Social Programs 

Twentieth-century Chile has had an extensive system of state- 
run welfare programs, including those in the social security, health, 
and education areas. From the mid-1970s to the early 1990s, spend- 
ing on all these programs ranged from as little as 19 percent to 
as much as 26 percent of the gross domestic product (GDP — see 
Glossary), proportions that were similar to those spent in 1975 by 
countries belonging to the Organisation for Economic Co-operation 
and Development (OECD — see Glossary). In the same period, 
about two-thirds of the national labor force was covered by old- 
age pensions and other benefits. In addition, there was universal 
access to curative health care and programs of preventive care for 
all expectant mothers, infants, and children less than six years of 
age who did not have recourse to alternative health care. In addi- 
tion, the state-run educational system, which was open to every 



98 



The Society and Its Environment 



child at primary and secondary levels but had admissions standards 
for higher education, was free of charge, except for nominal matric- 
ulation fees at all levels (see Education, this ch.). The state also 
offered low-income housing programs at heavily subsidized rates. 

Spending for these various programs increasingly outpaced 
revenues, as the decline in the mortality rate enhanced the depen- 
dency ratio and as the programs expanded. In addition, there were 
numerous programs, especially in the social security area, that 
provided very unequal benefits. Consequently, the military govern- 
ment redesigned the most important welfare institutions in ways 
that were consistent with its market-driven ideology, and social 
spending was scaled down to about 17 percent of GDP by 1989. 

By the end of its first year in office, the Aylwin government in- 
creased social spending by more than US$1.5 billion over the 
Pinochet government's budget. The revenue came from a 4 per- 
cent increase in the higher tax rate on enterprises, from 11 per- 
cent to 15 percent; a 2 percent hike in the national value-added 
tax (VAT — see Glossary) to 18 percent; and other sources. The 
objective of the Aylwin government was to enhance the purchas- 
ing power of minimum pensions, to increase the quality of educa- 
tional and health services, and to provide greater assistance in the 
housing field. The new programs were intended to have a positive 
effect on the distribution of income. The military government's 
reforms had privatized or decentralized the administration of many 
welfare and social-assistance institutions. The Aylwin government 
did not reverse these privatizations, although it attempted to in- 
crease the quality and funding of the institutions that remained 
in the public sector. It also decided not to recentralize the adminis- 
tration of the public portions of welfare, educational, and social- 
assistance institutions that had been placed in the hands of local 
or regional governments. The Aylwin administration was commit- 
ted to strengthening local and regional governments as part of a 
broad effort to enhance the decentralization of authority. However, 
in contrast to the military regime's decentralization projects that 
organized local and regional governments along lines of authoritari- 
anism and corporatism (see Glossary), new constitutional and le- 
gal reforms adopted in 1992 introduced democracy to these levels 
of government. 

Through the combination of many efforts in the social field since 
the 1930s, Chile has a relatively favorable overall human develop- 
ment index (HDI — see Glossary), as measured by the United 
Nations Development Programme (UNDP). The UNDP's Human 
Development Report, 1993 shows Chile ranking thirty-sixth among the 
world's 160 countries for this indicator, eighth among all developing 



99 



Chile: A Country Study 

countries, and second only to Uruguay among all Spanish- speaking 
Latin American countries. 

Social Security 

Chile was one of the first countries in the Americas to establish 
state-sponsored social security coverage. In 1898 the government 
set up a retirement pension system for public employees. In 1924 
the government approved a comprehensive set of labor laws and 
established a national social insurance system for workers. In large 
part, the authorities were responding to pressure exerted by the 
growing number of worker organizations and strikes. At the same 
time, a separate social-insurance system was set up for private white- 
collar employees, and the one for public employees was reorganized. 
The pension system for workers was known as the Workers' Secu- 
rity Fund (Caja del Seguro Obrero) and was modeled partly on 
the system pioneered by Otto von Bismarck, first chancellor of the 
German Empire (1871-90). The fund {caja) was established ad- 
ministratively as a semiautonomous state agency that received in- 
come from employer and worker contributions, as well as from state 
coffers. The systems for private and public employees provided 
higher benefits than the workers' caja, and they were financed in 
the same manner, except that the state acted as the employer for 
public employees as well. The armed forces had a separate pen- 
sion system. 

The Workers' Security Fund was reorganized in 1952, becom- 
ing the Social Insurance Service (Servicio de Seguro Social — SSS). 
Until its demise under the military government, the SSS served 
as the primary agency for the state-run social security system. SSS 
coverage expanded over the years. By the 1960s, in addition to 
providing old-age pensions to its main beneficiaries, it gave, at their 
death, pensions to their widows (but not their widowers) and to 
minor children, if any. It also paid flat monthly sums for each im- 
mediate family dependent, income payments for qualified illness- 
es and disabilities, and several months of unemployment insurance, 
albeit all at very low levels. 

Although the fund originally was meant to meet the needs of 
miners and urban blue-collar and service workers, including domes- 
tics, over the years the number of occupational groups that parti- 
cipated in what became a system of different semiautonomous state 
funds increased gready. By the early 1970s, there were thirty-five 
different pension funds (although three of them served 90 percent 
of contributors) and more than 150 social security regimes for the 
various occupational groups. This expansion led to many inequi- 
ties because the newly incorporated groups demanded and obtained 



100 



The Society and Its Environment 



by law special treatments and new benefits that had been denied 
to original participants, even when these new groups' programs 
were added to existing funds. There was not even a standard retire- 
ment age for all groups. Funding for the various pension programs 
became extremely complex because the state's contributions were 
drawn by law from different tax bases. This pattern of growth of 
social security institutions is typical of countries in which the sys- 
tem is not conceived from the very beginning on a universal basis 
but rather is established for particular categories of employment. 
Because coverage continued to be conditioned on the employ- 
ment history of the main beneficiary, it was never extended to all 
Chileans, even during its heyday in the early 1970s. 

The military government initially hoped to rationalize what had 
become an unwieldy system, but eventually it changed the whole 
system. It decided not to continue with a basic organizational prin- 
ciple of most social security systems, the pay-as-you-go system, 
whereby benefits are paid out of funds collected from those who 
are still contributing. In addition, the government decided to priva- 
tize the organization and management of pension funds and to dis- 
continue the state's own contributions to them. Thus, the military 
regime enacted the legal basis for the creation of privately run 
pension-fund companies, stipulating that all new workers enter- 
ing the labor force had to establish their accounts in the new pen- 
sion companies. Moreover, the government also created incentives 
for people in the semiautonomous, state-run system to transfer out 
of that system by reducing the proportion of each employee's 
paycheck that would be deducted under the new system to about 
15 percent of gross income, instead of the prior 20 percent or 25 
percent, and by permitting a transfer of funds based on the num- 
ber of years individuals had paid into the system. 

The new privately run pension funds are based on the notion 
of individual capitalization accounts. Pension amounts are set by 
how much there is in the individual account, which is determined 
by the total that has been contributed plus a proportional share 
of the pension fund's investments. In any event, by law no pen- 
sion is allowed to fall below 70 percent of an individual's last month- 
ly salary. If there are insufficient funds to generate the required 
pension levels in the account, the pension-fund company must make 
up the difference. If the company is unable to meet its obligations, 
the state, which guarantees the system, has to cover the shortfall. 

Employees are allowed to choose the pension-fund company that 
will handle their account, and those who are self-employed may 
also elect to establish individual accounts. This choice is intended 
to stimulate competition among pension-fund companies in order 



101 



Chile: A Country Study 

to keep the administrative fees charged to account holders at a 
reasonable level, and to encourage the companies to invest the 
money they accumulate so as to generate the highest yields. Em- 
ployers no longer contribute to employees' pensions under the new 
system. Disability and survival pensions are paid out of an account 
funded by a 3.8 percent share of the 15 percent the account holders 
contribute, leaving the remaining 11.2 percent to build up the 
pension-generating account. The 3.8 percent share is contracted 
out by the pension funds to life insurance companies, many of them 
newly created to meet the enormous increase in demand for their 
services. Individual account holders are also permitted to make pay- 
ments in excess of the obligatory minimum. The retirement age 
is set at sixty-five years for men and sixty years for women, although 
individuals who accumulate enough funds to obtain a pension equal 
to 110 percent of the minimum pension may retire earlier. 

The new system took effect in 1981, and the great majority of 
the contributing population opted to change to it. Deciding not 
to make substantial changes in the social security system, the Aylwin 
government increased the minimum pension paid by what remained 
of the state-run social security system by about 30 percent in real 
terms. By December 1990, there were about 3.7 million people, 
or 79 percent of the labor force, with accounts in fourteen pension- 
fund companies, called Pension Fund Administrators (Adminis- 
tradoras de Fondos de Pensiones — AFPs). A large proportion of 
the uncovered population consisted of self-employed people; only 
3 percent of the total accounts came from that group. The funds 
gathered large sums of money relative to the size of the national 
economy. By the end of 1992, the pension and life insurance com- 
panies had accumulated an estimated US$15 billion. The state regu- 
lates and oversees the pension-fund companies through a newly 
created office that issues strict investment guidelines. 

This radical departure from past institutional practices in the 
pension system is unique, and it drew considerable attention from 
experts in other Latin America countries also facing looming finan- 
cial crises in their own social security systems. By generating large 
amounts of capital in the private sector, the new system energized 
the previously anemic Chilean capital markets. Because it has oper- 
ated only for about a decade, however, it has yet to meet the test 
that will occur when the new pension funds have to pay out in 
benefits what would correspond to an actuarially normal load. Most 
of the nation's retirees and older workers have stayed in the state- 
run social security system, now called the Institute of Pension Fund 
Normalization (Instituto de Normalizacion Previsional — INP). By 
the end of 1990, the private pension companies were only paying 



102 



The Society and Its Environment 

out benefits to 2.3 percent of their affiliates (see Economic Results 
of the Pensions Privatization, ch. 3). 

Health Programs 

The state's efforts in the health field began in 1890 with the cre- 
ation of an agency in charge of public hygiene and sanitation. 
Despite some subsequent initiatives to prevent and treat work- 
related accidents, it was not until 1924, with the establishment of 
the social security system, that the state assumed an active role in 
providing health care to the population. Between the mid- 1920s 
and the early 1950s, state-run programs for health care were or- 
ganized around the pension funds. During the 1940s, public health 
experts argued that the individual pension funds could not organize 
health delivery systems for their affiliates in a rational way. It was 
also argued that a system was needed that would provide more com- 
prehensive coverage to the whole population, not only those who 
had accounts in the pension funds, if the country were to improve 
its overall health indexes. The eventual acceptance of these argu- 
ments by policy makers led in 1952 to the creation of the National 
Health Service (Servicio Nacional de Salud — SNS). 

The SNS continued to provide care to all those who held ac- 
counts in the various funds, free of charge to workers and their 
families in the social security system and for a variable fee to others. 
In addition, it extended health care to the population at large regard- 
less of ability to pay. Services to those who were poor could be slow 
and often inadequate if a condition was not life-threatening, but 
accidents and other emergencies normally were given immediate 
attention. Moreover, the SNS tried to identify specific health 
problems and focus on providing care in these areas, such as giv- 
ing all women primary prenatal and postpartum care (and access 
since the 1960s to contraception), inoculating the population against 
certain diseases, and working to improve nutrition and hygiene 
through extension programs and publicity. It is estimated that 65 
percent of the national population used the state-run system for 
curative medicine without paying fees. The SNS coexisted with 
private medical practices and hospitals, which were preferred by 
people who could afford them. The military developed its own sys- 
tem of clinics and hospitals. In the late 1960s, the government took 
the initiative to develop a new program for white-collar employees, 
permitting users to select their physicians. The program was funded 
by payroll deductions but required users to pay a fee equal to 50 
percent of the cost of their care. The program developed its own pri- 
mary- and preventive-care clinics and laboratories, although it relied 
on the hospitals of the SNS for backup care of the more serious 



103 



Chile: A Country Study 

cases and for hospitalizations. All but 15 percent of hospitaliza- 
tions took place in SNS hospitals. 

All physicians were obligated to work for the SNS for two years 
after graduation; they were usually sent to rural areas and small 
towns where there were chronic shortages of doctors. During the 
rest of their professional lives, physicians were also obligated to 
work a certain number of hours a week for the SNS, for which 
they received relatively small honoraria; in exchange, physicians 
took advantage of many of the facilities of the state system to treat 
and test their private patients. 

By the early 1970s, the state-run health programs faced a finan- 
cial crisis. Given that the SNS was intimately tied to the social secu- 
rity system, the military government could not change the latter 
without altering the former. Thus, in 1980 and 1981 policy mak- 
ers redesigned the nation's health care institutions. 

As a result, the Chilean health system in the early 1990s con- 
tained essentially five components. The first is the main successor 
of the SNS, now called the National System of Health Services (Sis- 
tema Nacional de Servicios de Salud — SNSS). In 1988 the SNSS 
employed about 62,000 professionals, including about 43 percent 
of the nation's 13,000 physicians, many fewer than had worked 
for the SNS because physicians no longer had any obligation to 
serve the public health system. The SNSS's administration was 
decentralized into twenty-seven regional units, and control over 
its clinics and primary-care centers was transferred to the nation's 
340 municipal governments. However, the national government 
remained the main source of funding for these various units, and 
it continued to control their basic design, including staff size and 
equipment. The SNSS's funding comes from general state revenues 
and from a contribution of 7 percent of taxable income (up from 
the original 4 percent in 1981) from the employed population. Ac- 
cess to the SNSS is open to everyone, free of charge in the case 
of indigents and of those whose income falls below a certain level; 
a variable percentage of the cost up to 50 percent is paid by those 
with higher incomes. 

The SNSS organizes and implements the broad public health 
programs in areas such as inoculations and maternal-infant care. 
It provides periodic preventive medical care to all children under 
six years of age not enrolled in alternative medical plans. Through 
this program, which has broad national coverage, low-income 
mothers can receive supplemental nutritional assistance for their 
children and for themselves as well if they are pregnant or nursing. 
As a result, the incidence of moderate to severe childhood malnutri- 
tion among those participating in the program has been reduced 



104 



The Society and Its Environment 



to negligible levels in Chile, while only about 8 percent of all chil- 
dren suffered mild malnutrition in 1989. The SNSS is the largest 
health care provider in the country. In the late 1980s, it served 
8.2 million people, or about 64 percent of the total population, and 
its total expenditures on its participants in 1987 equaled about 
US$22 per person. 

The second component of the health system is the National 
Health Fund (Fondo Nacional de Salud — Fonasa). Fonasa is part 
of the SNSS, except that those who register in the program may 
select their own primary-care physicians, as well as specialists. In 
this sense, Fonasa continues the modus operandi of the program 
initiated in the late 1960s for white-collar employees, except that 
anyone can register in it. Fonasa affiliates direct their payroll or 
self-employment contributions to the fund. Pensioners of the state- 
run system, the INP, may also choose to participate in Fonasa. 
The fund reimburses its users a variable portion of the cost of med- 
ical attention on presentation of vouchers for services that have been 
performed (an average 36 percent reimbursement in 1989). In 1987 
Fonasa served 2.5 million people, and health expenditures in it 
amounted to US$79 per affiliate. 

The Security Assistance Institutions (Mutuales de Seguridad — 
MS) constitute the third element in the health system. These con- 
sist of hospitals that deal primarily with treatment of the victims 
of work-related accidents. These institutions house some of the best 
trauma and burn centers in the country. The MS are financed out 
of employer contributions equivalent to about 2.5 percent of their 
total payrolls and completely cover the medical expenses of em- 
ployees of the affiliated enterprises who are injured at work. In ad- 
dition, the MS pay a temporary disability pension. The 1.96 million 
employees who have access to these institutions work for 52,000 
different enterprises. This program is among the better funded, 
given that its income of US$123 million amounted to about US$62 
per covered worker, while the rate of work-related accidents was 
only about 10.8 percent per year for all incidents, however minor. 
Safety experts hired by the MS system are also in charge of in- 
specting workplaces and suggesting improvements to prevent 
accidents. The MS are composed of numerous institutions admin- 
istered by boards with employer and employee representatives. In 
1987 they ran eight hospitals and nineteen clinics, mainly in Chile's 
most important urban centers. The product of initiatives taken by 
some of the country's largest employers in the late 1950s, the MS 
expanded greatly in the 1980s. 

Private insurance companies that are affiliated with the Insti- 
tute of Public Health and Preventive Medicine (Instituto de Salud y 



105 



Chile: A Country Study 

Prevention — Isapre) constitute the fourth element in the health sys- 
tem. People enroll by asking their employers to direct their health 
deduction to these companies, and they pay an additional premium 
depending on the specific insurance policy. Medical services are 
reimbursed to users at a percentage of cost. In 1987 about 1.5 mil- 
lion people were enrolled in the Isapre, with expenditures of about 
US$166 per enrollee. Critics of the Isapre insurance companies 
note that the companies do not help mitigate the nation's highly 
regressive distribution of income because they channel the deduc- 
tions of many people with higher incomes out of the SNSS. 
Moreover, as private carriers, the Isapre companies may deny en- 
rollment to those who are at higher risk (as a result of serious ill- 
ness or age), and they are prone to drop those who become excessive 
risks. Consequently, the SNSS must take up the burden of cover- 
ing the health care of high-risk individuals. 

The fifth component of the health care system is private medi- 
cine, which includes private hospitals and clinics. Most physicians, 
dentists, and ophthalmologists maintain a private practice even if 
they work for the SNSS or other systems. There are also private 
health insurers who do not form part of the Isapre structure be- 
cause they do not collect their premiums from payroll deductions. 
In 1987 they insured 500,000 people drawn from the population 
with the highest incomes. 

In 1992 Chilean health indicators were much closer to those of 
industrial nations than to those of the developing world (see table 
14, Appendix). The four leading causes of death in Chile are cir- 
culatory diseases (27 percent), cancer (18 percent), accidents (13 
percent), and respiratory illnesses (11 percent). Medical visits aver- 
age about 3.5 per person per year, or about 2 to 2.5 for the general 
population and 1 to 1.5 for maternity and child check-ups. The 
SNSS handles 89. 1 percent of all these visits (16.3 percent of them 
through Fonasa). Fully 98.4 percent of all births occur with profes- 
sional assistance in hospitals or maternity clinics. In rural areas, 
where women might need to travel longer distances to give birth, 
they can spend the last ten to fifteen days of pregnancy in special 
hostels. Inoculations of infants and children are virtually univer- 
sal for tuberculosis, diphtheria, pertussis, tetanus, poliomyelitis, 
and measles. 

According to the Pan American Health Organization, the num- 
ber of cases of acquired immune deficiency syndrome (AIDS) is 
gradually rising, with 3.8 per million population in 1987, 5.4 per 
million in 1988, 6.3 per million in 1989, 8.9 per million in 1990, 
and 11 per million in 1991. As of the end of 1991 in Chile, 196 
individuals with AIDS in Chile had died. According to Health 



106 



The Society and Its Environment 



Under Secretary Patricio Silva and the National AIDS Commission, 
of the 990 individuals who were registered as having been infected 
with the AIDS virus in the country, 630 had become sick and half 
of them had died by the end of 1992. The report stated that 93 
percent of those diagnosed were men and 7 percent were women. 

Although the government of President Patricio Aylwin did not 
make structural changes to the health system, it increased funding 
for the portions of the system that most benefited the poor, espe- 
cially primary care services. The salaries of health workers in the 
public sector were increased. The government also enhanced the 
decentralization of authority in the public health sector by giving 
local and regional governments more decision-making power over 
the distribution and equipment of health-care resources and pro- 
visions within the limits of national government funding allotments. 

Housing Policies 

The state began its involvement in the construction of low-cost 
housing in 1906, with a law stipulating that builders of low-cost 
units would qualify for a complete exemption from all taxes and 
that their owners would be exempt from real estate taxes for twenty- 
five years. Subsequent housing programs in Chile have usually con- 
sisted of providing subsidies to those who built low-cost houses or 
to those who bought them. In addition, the programs have fur- 
nished one-time grants for the necessary down payments to per- 
mit people to obtain a loan or qualify for a housing program. 
Generally, all three features have been in place since the 1950s, 
although the emphasis on one or another means has shifted with 
changing governments. Subsidies to buyers have been channeled 
through below-market interest rates for long-term loans. These 
generally were made available through pension plans. Between 1955 
and 1973, these subsidies mostly benefited the poorest 60 percent 
of the population, especially the lower-middle 30 percent (for defi- 
nition of extreme poverty — see Glossary). 

Starting in the 1950s, the state also assumed a major role in the 
construction of low-cost housing. The Housing Corporation (Cor- 
poracion de la Vivienda — Corvi) was established by the national 
government in 1953. Between 1960 and 1972, an average of 42,000 
houses per year were built in Chile, of which the state built 60 per- 
cent and the private sector with state financing built 20 percent; 
private companies built the remaining 20 percent with private 
funding. 

The military government cut public spending for housing to less 
than half of its 1970 levels. Supporters of the regime argued that 
state resources were more efficiently used than before, citing a slight 



107 



Chile: A Country Study 

increase, to about 43,000 units, in average annual housing con- 
struction. They also argued that attempts were made — with greater 
success in the late 1980s than at the beginning of the Pinochet 
regime — to channel state subsidies to the poorest sectors. However, 
on average the number of new housing units was equal to no more 
than 56 percent of the total number of new households created be- 
tween 1974 and 1989; the result was an increase in the nation's 
housing deficit. A rapid acceleration of construction toward the end 
of the 1980s, with almost 84,000 units being built in 1989, kept 
the deficit from becoming even worse. 

The military regime reduced the subsidies on housing loans and 
initiated a monthly readjustment of all such loans according to the 
rate of inflation as a means of retaining their real value. The govern- 
ment also increased the participation of the private sector in the 
construction of housing and municipal buildings. It also attempted 
to allocate houses primarily to households that met certain savings 
goals, an objective that proved virtually impossible for poor fami- 
lies to meet. As a result, toward the end of military rule the state 
put more resources into one-time grants to enable families to cover 
the down payment. 

The Aylwin government increased public funds for housing by 
about 50 percent, although construction remained in the hands of 
the private sector. It changed the eligibility requirements for pub- 
lic housing programs to favor poorer people unable to save money. 
The government's intention was to freeze the housing deficit that 
existed in 1990 by facilitating the building of as many new houses 
as were needed by the new households that were being formed (see 
Construction, ch. 3). It also reintroduced utilities subsidies to poor 
neighborhoods and placed a greater emphasis on communal services 
for such areas. 

Education 
Enrollments 

Despite plans dating back to 1812 to establish widespread primary 
education, elementary school attendance did not become compul- 
sory until 1920. However, the government did not provide effec- 
tive means to enforce this policy fully. There was considerable 
progress, especially in the 1920s and the 1940s, but by mid-century 
children of primary school age were still not universally enrolled. 
The principal difficulty lay in the incomplete matriculation and 
high dropout rate of the nation's poorest children. For this rea- 
son, in 1953 the government created the National Council for School 
Aid and Grants (Junta Nacional de Auxilio Escolar y Becas), which 



108 



- / 



A resident of Conchali, a low- 



Santiago, making use of a 
caseta, a government-financed 
and government-built 
housing unit containing cooking 
and sanitation facilities 
Courtesy Inter-American 
Development Bank 



income district in northern j^^H| 



The mayor of the low-income 
community of Pefialolen on the 
eastern side of the Santiago 
metropolitan area paying a visit 
to her constituents to 



inspect casetas 
Courtesy Inter-American 
Development Bank 




109 



Chile: A Country Study 



was charged with providing scholarships and with making school 
breakfasts and lunches available to all children in the tuition-free 
private and public schools. Through these means, policy makers 
hoped to encourage the very poorest parents to send their children 
to school and keep them there. By the early 1970s, school break- 
fasts were reaching 64 percent of all primary school students, and 
lunches were being provided to 30 percent. This strategy was ap- 
parently successful, and in the mid-1960s primary education be- 
came nearly universal. In 1966 the number of years of primary 
(and therefore compulsory) education was increased from six to 
eight; secondary education was thereby reduced to four years. In 
the mid-1980s, primary school attendance fluctuated between 93 
percent and 96 percent of the relevant age-group — a percentage 
that was less than universal only because some children advanced 
into secondary school at the age of fourteen instead of the normal 
age of fifteen. 

Beginning in the first half of the nineteenth century, Chile's 
governments made an effort to create secondary schools and led 
Latin America in establishing high schools for girls as well as for 
boys. By 1931 Chile had forty-one state-run high schools for boys 
and thirty-eight for girls, as well as fifty-nine private high schools 
for boys and sixty for girls, with a total enrollment of 20,21 1 boys 
and 15,014 girls. Reflecting French and German influences on the 
nation's secondary education, high schools were intended to pro- 
vide a rigorous preparation for university education. 

Chile had other postprimary educational channels that were 
meant to impart more practical or professional forms of training. 
Among these were normal schools for the instruction of primary 
school teachers (the first one for women was created in 1854), 
agricultural schools (that taught the rudiments of agronomy, animal 
husbandry, and forestry), industrial schools (with such specialties 
as mechanics or electricity), commercial schools (with specialties 
in accounting and secretarial training), so-called technical wom- 
en's schools (that mainly taught home economics), and schools for 
painting, sculpture, and music. In 1931 there were 135 of these 
schools, with a total enrollment of 1 1 ,420 males and 1 1 ,391 females. 

Matriculation of relevant age-groups in all forms of secondary 
education remained low, as can be surmised from the 1931 figures, 
and progress was slow. The most rapid advances occurred in the 
1960s and early 1970s under the governments of presidents Frei 
and Allende, which increased spending for education at all levels. 
By 1970 about 38 percent of all fifteen- to eighteen-year olds in 
the country had matriculated from one form or another of second- 
ary education; by 1974 that figure had increased to 51 percent. 



110 



The Society and Its Environment 

Moreover, the curriculum in schools other than high schools had 
been enhanced significantiy, and the graduates of such schools could 
opt to continue on to university levels. During the rest of the 1970s, 
under the military government's first six years in power, second- 
ary school enrollments as a percentage of the relevant age- group 
stagnated. However, in the 1980s enrollments resumed their up- 
ward trend. Thus, from a level of 53 percent of the relevant age- 
group in 1979, secondary school matriculations rose to 75 percent 
in 1989. 

Although the Chilean state traditionally directed about half of 
its education budget to universities that were either free or charged 
only nominal matriculation fees, the numbers of students in them 
had always been tiny as a proportion of the national population 
between nineteen and twenty-four years of age. As in other areas 
of education, the Frei and Allende administrations sponsored the 
largest expansions in postsecondary enrollments. The total num- 
bers of students (including only those in the relevant age-group) 
almost doubled, from 41,801 in 1965 to 70,588 in 1970, and more 
than doubled from that number, to 145,663, in 1973. However, 
these enrollment figures were only equal to about 8 percent and 
13 percent of the relevant age-group in 1970 and 1973, respective- 
ly. During the rest of the 1970s, the total number of students in 
universities declined, reaching a low of around 9 percent of the 
relevant age-group in 1980, including students enrolled in the so- 
called Professional Institutes (Institutos Profesionales — IPs), which 
had been separated from the universities by the military govern- 
ment. During the 1980s, the numbers of students in universities 
and in the IPs increased slowly and stood at about 153,100 in 1989, 
or 10.3 percent of the relevant age- group. However, the military 
government fostered the creation of Technical Training Centers 
(Centros de Formacion Tecnica — CFT) as an alternative to post- 
secondary education. Enrollment in these centers increased rapid- 
ly during the 1980s, to about 76,400 students by 1989. In 1991 
a total of 245,875 students were in some form of higher or post- 
secondary education. 

At the beginning of the twentieth century, under the influence 
of German advisers, Chile began to develop preprimary educa- 
tion. Matriculation in these programs also remained very small 
until the 1960s. In contrast to its attitude toward higher educa- 
tion, the military government took great interest in this form of 
education, and enrollments increased greatly during the Pinochet 
years. State-funded programs for preschoolers, which enrolled about 
59,000 children in 1970, had increased their matriculation to about 



111 



Chile: A Country Study 



109,600 by 1974. In 1989 they enrolled 213,200 children, or about 
12 percent of the population under five years of age. 

Administration and Reforms 

Primary and Secondary Education 

Until 1980, authority over all primary and secondary schools 
was concentrated in the national government's Ministry of Public 
Education. In addition to allocating funds to schools, the ministry 
certified the qualifications of all teachers and employed those in 
the state-run system. It developed all basic course content, even 
for private schools, and approved all textbooks to be used through- 
out the country. 

Primary school teachers were trained mainly in normal schools, 
most of which were independent entities, although a few of these 
institutions were attached to universities. Secondary school teachers 
generally were graduates of pedagogical schools or university in- 
stitutes, where students would be trained in the different disciplines 
they would later teach. Primary and secondary school teachers opt- 
ing to work in the state-run system were assigned to schools during 
the first three years of their careers, a procedure that was meant 
to ensure that all rural and provincial schools had the requisite staff- 
ing. The careers of primary and secondary school teachers employed 
by the state were controlled by a national statute that determined 
promotions according to a point system and salaries according to 
a fixed scale. Salary supplements were given to those who taught 
in areas that were geographically isolated or had severe climates. 
Teachers also had job tenure beyond a certain probationary period. 
The Ministry of Public Education sponsored regular winter- and 
summer-vacation training programs for teachers that were designed 
to bring them up to date with curriculum changes and with new 
thinking in their disciplines. Merit increases were given to those 
who participated in these programs. 

The Ministry of Public Education gave subsidies to private 
schools that did not charge tuition. These subsidies, amounting 
to about half the per-student cost of public education, were based 
on calculations of salary and other fixed costs. They were given 
primarily to schools sponsored by the Roman Catholic Church, 
as well as by Protestant churches. The teachers of these schools 
(except those who were in religious orders or in the clergy) were 
supposed to have the same salary and working conditions as teachers 
in the public system. Many teachers in the state-run system sup- 
plemented their salaries by taking on additional hours in the pri- 
vate schools, which were supposed to follow the national curriculum 



112 



The Society and Its Environment 



whether or not they received state subsidies, although they were free 
to add supplementary courses. All state-run primary and secondary 
schools were visited regularly by supervisors employed by the Minis- 
try of Public Education, who would observe classes and monitor 
many final examinations. For purposes of certification, the final ex- 
aminations of all private secondary schools were conducted by com- 
mittees of teachers employed by the Ministry of Public Education. 

Despite the successes of this education system in terms of ex- 
panding enrollments and ensuring a uniform standard of quality 
across the nation, the military regime's social and economic plan- 
ners thought it gave the government too much influence over edu- 
cation, stifling parents' and local communities' freedom of choice. 
They also thought the administration of the system was too bureau- 
cratic and inefficient. 

The regime's education authorities decided to decentralize the 
administration of state schools by turning them over to the mu- 
nicipal governments. Presumably, the schools would thus become 
more responsive to local demands and needs, although the Minis- 
try of Public Education continued to issue the basic guidelines to 
be followed in the curricula, to approve textbooks, and, in princi- 
ple, to require the certification of teachers, although the standards 
became more flexible. Moreover, the national program of school 
breakfasts and lunches was transferred, along with the necessary 
resources, to the municipalities. The authorities committed the 
necessary funding to maintain universal primary enrollments and, 
after 1980, to continue to increase the size of secondary enroll- 
ments, despite the severe economic downturn of 1982-83. 

With the 1980 reforms, all teachers in the state-run system be- 
came municipal employees, effectively ending the national system 
controlling teachers' careers. The result was new inequalities in 
terms of income and benefits for teachers. Despite increased edu- 
cation subsidies from the central government to poorer munici- 
palities, the richer school systems were able to afford better teacher 
salaries and educational facilities. In addition, beginning in 1988 
municipal authorities were permitted to fire teachers, ending the 
tenure they had enjoyed in the national career system, a measure 
that generated widespread manifestations of teacher discontent, in- 
cluding strikes. 

The military government fostered the growth of privately run 
schools by further facilitating the process through which they could 
obtain subsidies. Moreover, tuition-free public and private schools 
were put on an equal footing in terms of access to state funding 
when both began to receive amounts calculated on a similar per- 
student basis. This amount was prorated on the basis of student 



113 



Chile: A Country Study 



attendance records, a measure that put the public systems at a dis- 
advantage because private schools could be selective in their ad- 
missions; they could therefore draw their student body from those 
with more stable family backgrounds and hence could require more 
regular attendance and better behavior. As a result of these new 
incentives, enrollments in the publicly funded but privately ad- 
ministered system increased at the expense of the state-owned 
schools. In 1980, before the beginning of the reform program, the 
state-run schools had enrolled about 79 percent of primary and 
secondary students, private but state-subsidized schools enrolled 
14 percent, and fully private schools (those that charged tuition) 
enrolled 7 percent. By the end of 1988, the proportion of students 
in the state-run schools (by then under municipal control) had 
dropped to 60 percent, the private but state-subsidized schools' 
proportion had increased to 33 percent, and the fully private schools 
continued to enroll 7 percent. Other data suggest that the number 
of primary and secondary students in private schools increased from 
27 percent in 1981 to 56 percent in 1986 (see table 15, Appendix). 
The authorities also transferred administration of the state's voca- 
tional, industrial, and agricultural schools to employer associations, 
although the public funding of these schools continued. 

The Aylwin government doubled funding for education by 1992 
and began to address the new challenge the nation confronted to 
increase the quality of education. As part of this effort, the govern- 
ment examined with renewed interest the issues of teacher morale, 
training, and careers. It decided to reinvigorate the national con- 
tinuing education programs for teachers and to reintroduce a Na- 
tional Statute for Teachers. This recreated in part the previous 
national career system, with a minimum starting salary of about 
US$250 per month for primary school teachers and promotions 
and raises based on years of service, merit, additional training, and 
premiums for teaching in areas that were isolated or had harsh cli- 
mates. However, because of the Aylwin government's commitment 
to the decentralization of authority, administration of the system 
of primary and secondary schools remained to a significant extent 
in the hands of local governments, with continued efforts to provide 
increased funding to the poorer municipalities and regions. An initia- 
tive by the Aylwin government also committed it to increasing tech- 
nical training of workers and of youth who had already left the 
education system. By the end of 1993, about 100,000 people, prin- 
cipally youth, had graduated from such training programs. 

Higher Education 

Chilean universities are widely recognized as being among the 



114 



The Society and Its Environment 

best in Latin America. Before the education reforms of 1980, Chile 
had eight universities — two state-run and six private — although all 
received most of their funding from the state. The two state univer- 
sities consisted of the University of Chile (Universidad de Chile), 
founded in Santiago in 1842 as the successor to the University of 
San Felipe (Universidad de San Felipe; founded in 1758), and the 
State Technical University (Universidad Tecnica del Estado), 
founded in Santiago in 1947. The private universities consisted of 
the Pontifical Catholic University of Chile (Pontffica Universidad 
Catolica de Chile), founded in 1888; the University of Concep- 
cion (Universidad de Concepcion), founded in 1919; the Catholic 
University of Valparaiso (Universidad Catolica de Valparaiso), 
founded in 1928; the Federico Santa Maria Technical University 
(Universidad Tecnica Federico Santa Maria), founded in Val- 
paraiso in 1931; the Southern University of Chile (Universidad 
Austral de Chile), founded in Valdivia in 1955; and the Univer- 
sity of the North (Universidad del Norte) in Antofagasta, founded 
in 1956. The nation's largest and most important university, the 
University of Chile, has the authority to oversee the quality 
of professional training programs in important fields, such as medi- 
cine, in the other universities. The University of Chile, the Pon- 
tifical Catholic University of Chile, the Federico Santa Maria 
Technical University, and, to a lesser extent, the University of Con- 
cepcion all developed campuses in other cities during the expan- 
sion of university enrollments in the late 1960s and early 1970s. 

As noted previously, Chilean universities did not charge tuition, 
aside from minimal matriculation fees that were, following changes 
introduced in the mid- to late 1960s, higher for students of more 
affluent parents. In effect, the state used general tax revenues to 
subsidize a higher-education system whose students were drawn 
disproportionately from the middle and upper classes. The regres- 
sive impact of this policy on the nation's distribution of wealth had 
been noted repeatedly by economists and sociologists since at least 
the 1950s. 

The military government took a highly critical view of the na- 
tion's university system. Persuaded by the notion that state fund- 
ing for lower education is more efficient in terms of generating the 
necessary human capital for economic development, the military 
decided to give priority in resource allocation to preprimary, 
primary, and secondary schools. In addition to politically moti- 
vated purges of faculty members and students, among the first 
changes the military authorities made at the higher-education level 
was to charge students substantially higher enrollment fees. Low- 
income students were supposed to continue to have access to higher 



115 



Chile: A Country Study 



education through an expanded system of student loans with gener- 
ous repayment terms. Yet, as noted earlier, the expansion of higher- 
education enrollments that had begun in the 1960s ceased after these 
new policies were put into place. 

With the 1980 education reforms, the military government split 
the two state universities apart, creating separate universities out 
of what had been their regional provincial campuses. In addition, 
taking a dim view of increases in the numbers of training programs 
and degree programs at these universities since the 1960s, the re- 
gime limited the degrees that could be obtained in the state-run 
universities to twelve of the most traditional fields, such as law, 
medicine, and engineering. Degrees in other areas henceforth had 
to be obtained from professional institutes; those sections of the 
state universities consequently were detached, with some attrition, 
and transformed into freestanding entities. The large School of Ped- 
agogy of the University of Chile, for example, became the Peda- 
gogical Institute. 

The Pinochet government also fostered the formation of new pri- 
vate universities and professional institutes, allowing them to set 
tuition at whatever level they wished and promising to give them 
direct per-student subsidies, as well as funds for loans to low-income 
students, on an equal footing with older institutions. The educa- 
tion authorities hoped to stimulate competition among the univer- 
sities and institutes for the best students by granting the per-student 
subsidies on the basis of schools' ability to attract the students with 
the highest scores on a national aptitude test required of all first- 
year applicants. This competition was thought to be an expedi- 
tious way to encourage efforts to increase the quality of higher edu- 
cation. Subsequently, the state subsidies did not become nearly as 
important as was expected because funding for universities and 
for student loans declined beginning with the economic crisis of 
1982-83. The lower funding levels led to decreases in salaries for 
faculty and other personnel across the country. 

As a result of the policies of breaking up the state universities 
and stimulating the formation of private institutions, the number 
of universities increased to forty-one by 1989. Only half of these 
received state funding that year. In addition, by 1989 there were 
fifty- six professional training institutes, only two of which received 
state funding that year. There was also a large increase in the num- 
bers of centers for technical training. In 1989 there were 150 such 
centers, none of which received state support. Relying entirely on 
tuition payments, these centers had responded to a demand for post- 
secondary education that the universities and professional institutes, 
despite their increased number, had been unable to meet. However, 



116 



The Department of Physical Sciences and Mathematics at the 
Pontifical Catholic University of Chile in Santiago 
Courtesy Inter-American Development Bank 

the quality of the training these centers provided was questiona- 
ble. Most of them had two-year training programs with few facili- 
ties other than classrooms. 

The changes introduced by the military government increased 
the number and variety of higher education institutions, but the 
reforms also led to much greater disparities among them, as well 
as to a likely decline in the overall quality of the nation's higher 
education system. There was an increase in part-time faculty teach- 
ing, a decline in full-time faculty salaries, and a much greater dis- 
persion of resources needed by important facilities, such as 
laboratories and libraries. These changes also led to the creation 
of a considerable number of research institutes with no student train- 
ing programs that were dependent on grants or research contracts 
from international or national sources for their funding. These 
institutes developed most prominently in the social sciences and 
became an important alternative source of employment for spe- 
cialists who had been or would have been engaged by universities. 
Consequently, in contrast to the period before 1973, most of the 
innovative thinking and writing in these areas was no longer being 
done at universities, and new generations of students were having 
less contact with the best specialists in these fields. 



117 



Chile: A Country Study 

The Aylwin government did not introduce fundamental changes 
in the higher education system handed down to it by the military 
regime. It continued to fund higher education in part by allocat- 
ing per- student subsidies to institutions able to attract students who 
scored highest on the multiple-choice examination modeled on the 
Scholastic Aptitude Test used in the United States. However, the 
Aylwin government was critical of what it considered an excessive 
disaggregation and dispersion of higher education institutions. Con- 
sequently, it concentrated more of its direct subsidies on the tradi- 
tional universities and their offshoots and attempted to enhance 
their quality by making more funds available for basic and applied 
research. The government also increased funding for low-income 
student loans and scholarships to pursue studies at any institution. 

Religion and Churches 

Religious Affiliations and Church Organization 

Roman Catholicism is an integral part of Chile's history and 
culture, and the great majority of Chileans consider themselves Ro- 
man Catholic. However, their numbers have been declining since 
1970, while the Protestant population has been increasing. The 1970 
census showed that about 90 percent of the population was nomi- 
nally Roman Catholic, and a little over 6 percent was Protestant. 
The 1982 census did not include questions on religion. The 1992 
census showed that 76.9 percent of the population fourteen years 
of age and older declared itself Catholic, while 13.1 percent declared 
itself either "Evangelical" (see Glossary) or "Protestant" (see 
table 16, Appendix). This latter percentage reflected a moderate 
but steady increase with each census since 1920, when only 1.4 
percent of the population was counted as Protestant. About 90 
percent of Protestants belong to Pentecostal (Evangelical) denomi- 
nations. 

The more than doubling of the proportion of Protestants in the 
total population over the 1970-92 period means that a large num- 
ber of them are converts. Surveys taken in December 1990 and 
October 1991 by the Center for Public Studies (Centro de Estu- 
dios Publicos — CEP) in collaboration with Adimark, a polling agen- 
cy, showed that about 95 percent of Roman Catholic respondents 
have been Catholics since childhood, whereas only about 38 per- 
cent of Protestants said they have been Protestants since their ear- 
ly years. Moreover, fully 26 percent of Protestants noted that they 
had converted sometime in the previous ten years. 

According to the 1992 census, there was also a significant minority 
of about 7 percent of Chileans who declared themselves indifferent 



118 



The Society and Its Environment 



to religion or were atheists. This group had increased from a little 
over 3 percent in 1970. Other religious groups, mainly Jewish, Mus- 
lim, and Christian Orthodox, accounted for 4.2 percent of the popu- 
lation fourteen years of age or older. 

The CEP-Adimark surveys also included questions on religious 
practice. According to the surveys, about a quarter of all adult 
Chileans attend church services at least once a week, a proportion 
indicative of considerable secularization. A much greater propor- 
tion of Protestants (about 46 percent) than of those who said they 
are Roman Catholics (about 18 percent) are regular churchgoers. 
Thus, the authors of the CEP-Adimark report note that there is 
roughly one Protestant for every two Catholics among people at- 
tending church at least once a week in Chile. The proportion of 
nominal Catholics attending mass weekly seems to have increased 
slightly since the late 1970s; prior studies had shown an attendance 
rate between 10 and 15 percent. 

The distribution of practicing Catholics and Protestants varies 
dramatically on the basis of socioeconomic status. In 1990-91 about 
half the practicing Protestant population (52.1 percent) was com- 
posed of individuals from poorer groups, while a tiny minority (2.3 
percent) had high socioeconomic status. Among practicing Catho- 
lics, the proportion with high status was significant at 15 percent, 
whereas the poorest segment constituted about a fifth (21.8 per- 
cent) of all those who practiced. These differences are so salient 
that among the poor Chilean urban population, for every practic- 
ing Roman Catholic there is a practicing Protestant. The growth 
of Protestantism has therefore mainly been at the expense of the 
Catholicism of the lower socioeconomic groups, among whom 
Catholicism has long been weakest. Surveys taken between the late 
1950s and early 1970s showed that only between 4 and 8 percent 
of working-class people who were nominally Catholic attended mass 
weekly. The 1991 survey showed that 93.4 percent of high-income 
respondents indicated that they are nominally Catholic; the propor- 
tions declined to 75.2 percent of middle-income people and to 69 
percent of those with lower incomes. Among the latter, 22 percent 
consider themselves nominally Protestant. The practicing Protes- 
tants also tend to work in greater proportions in the personal ser- 
vice areas of the economy and to be less educated than Catholics. 
This is consistent with the generally lower economic status of the 
Protestant population. 

Slightly more than half of all Chileans who declared a religious 
affiliation are women. However, among those who practice, the 
proportion of women is significantly higher. This is particularly 
the case for Protestants. Among urban Protestant respondents, 



119 



Chile: A Country Study 

about 70 percent of those who attend church services at least once 
a week are women. Among Roman Catholics, the proportion of 
practicing women is about 63 percent. 

The Roman Catholic Church is divided into twenty-four dio- 
ceses and one armed forces chaplaincy. These are led by five arch- 
bishops and thirty bishops, some of whom serve as auxiliaries in 
the larger dioceses. There are also two retired cardinals. The church 
has long suffered from a shortage of priests. Since the 1960s, they 
have numbered between 2,300 and 2,500, about half of them for- 
eign born. By 1990 there were 3,000 Catholics per priest. With 
about 760 parishes throughout the country, the church is unable 
to extend its presence to the entire Catholic population. This situ- 
ation is illustrated by a comparison of the number of places of wor- 
ship for Santiago's Catholic and Protestant populations: 470 Roman 
Catholic parishes and chapels versus about 1,150 churches and other 
places of Protestant (mainly Pentecostal) worship. 

Religion in Historical Perspective 

Independence from Spain disrupted the church-state relation- 
ship. The clergy was divided over the question of breaking the ties 
to Spain, although the most prominent church officials were gener- 
ally royalists. As a result, the new independent governments and 
the leaders of the church viewed each other with distrust. The de- 
velopment of what would later be called the ' 'black legend' ' (a highly 
unfavorable view of the colonial administration, of which the church 
was an integral part), coupled with an admiration for the progress 
of Protestant lands, fueled this distrust. Despite their misgivings 
about church attitudes toward independence, the new rulers in- 
sisted that they were entitled to exercise the patronato real (see Glos- 
sary), the agreement between the Spanish crown and the pope, 
thereby assuming this important royal power as well. This preroga- 
tive was enshrined in the 1833 constitution, which made Roman 
Catholicism the established church of the new Chilean state. Con- 
sequently, to oversee the goverance of the church, the authorities 
followed the tradition of sending church appointments to the Vatican 
for its formal approval. For their part, church officials expected 
that the government would continue to ban all other religions from 
the country. Moreover, they hoped to retain full authority over 
education, to keep all civil law subordinate to canonical law, and 
to continue to function as the state's surrogate civil registry, as well 
as to control all cemeteries. In addition, they increasingly asserted 
the independence of the church from the interference of state 
authorities. 



120 



A church in Rancagua, central Chile 
Courtesy Embassy of Chile, Washington 



121 



Chile: A Country Study 



The church-state relationship was fraught with potential for con- 
flict, and as the nineteenth century progressed many conflicts did 
indeed emerge. By the late 1850s, a fundamental fault line in 
Chilean politics and society had developed between unconditional 
defenders of church prerogatives, who became the Conservatives, 
and those who preferred to limit the church's role in national life, 
who became the Liberals or, if they took more strongly anticleri- 
cal positions, the Radicals. Although most Liberals and even most 
Radicals were also Roman Catholics, they were in favor of allow- 
ing the existence of other churches and of limiting canonical law 
to church-related matters, while establishing the supremacy of 
the state's laws and courts over the nation as a whole, even over 
priests and other church officials. They also advocated the crea- 
tion of non-Catholic schools and civil cemeteries, and they pressed 
for the establishment of a state-managed civil registry that would 
be entitled to issue the only legally valid birth, marriage, and death 
certificates. By the 1880s, a decade that saw a break in relations 
between the Chilean government and the Vatican, all of these points 
of the more secular and anticlerical agendas had been established. 
However, the Roman Catholic Church continued to be the estab- 
lished church, dependent on the state for its finances and appoint- 
ments. This led periodically to new political tensions. 

Emerging in the 1820s, the first source of state-church conflicts 
was the issue of the right of non-Catholics to practice their religion. 
The government favored allowing them to do so in private homes 
or other nonpublic places, while the Roman Catholic Church op- 
posed this notion. The issue was a question of considerable sig- 
nificance for more than just civil liberties. 

Independence from Spain had permitted the legal establishment 
of direct commercial links between Chile and other countries 
throughout the world. These links led to the creation, especially 
in Valparaiso, of wholesale commercial enterprises that brought 
British and other foreign nationals who were non-Catholic to the 
country, and they demanded the right to practice their religion. 
Denying them religious freedom not only created diplomatic 
problems with the dominant economic powers of the time but also 
had the potential to undermine the operations of the export-import 
concerns that handled much of the emerging country's foreign trade. 

Beginning in the 1840s, the Chilean government sponsored the 
immigration of German settlers to the southern lake district. Most 
of them, contrary to the government's wishes, came from Protes- 
tant parts of Germany. As a result, the first Protestant services in 
Chile, mainly Anglican and Lutheran, began in immigrant com- 
munities. Initially, they were merely tolerated by the authorities, 



122 



The Society and Its Environment 



but in 1865 a new law interpreting the religious clause of the con- 
stitution that declared Roman Catholicism as the official state 
religion permitted private practice by non-Catholic denominations. 

In the last quarter of the nineteenth century, Protestant mission- 
aries of various denominations, beginning with the Presbyterians, 
came to Chile. Although they continued to serve mainly the im- 
migrant communities, they also made an effort to obtain Chilean 
converts. The Anglicans set up missions among the Mapuche, and 
these are still operating in Araucama Region. American Methodists 
founded schools — the well-known Santiago College, which was es- 
tablished in 1880, among them — that were open to middle- and 
upper-class Chilean children, especially girls. Parents seeking al- 
ternatives to Catholic education opted for Protestant missionary 
schools. By the turn of the century, a small community of local 
converts to Protestant denominations began to form. In 1909 a seg- 
ment of the new Methodist group that had adopted charismatic 
rituals broke off from the main missionary body. This breakaway 
group became the Pentecostal Methodist Church, which itself split 
in 1934 when the Evangelical Pentecostal Church was formed. 
These two denominations remained the principal Pentecostal groups 
in Chile, although there were many different subdenominations. 

Judaism, virtually unknown in nineteenth-century Chile, origi- 
nated with the Central European Jews who arrived in the country 
fleeing persecution mainly between World War I and World War 
II. Both Jews and Protestants, as religious minorities in a pre- 
dominantly Catholic country, were strongly in favor of religious 
freedoms and of full separation between church and state. It was 
therefore natural for them to identify more closely with the more 
secular and even anticlerical segments of Chilean society and pol- 
itics; and it was natural for the latter to consider them a part of 
their constituency. Yet, given their religious beliefs, strict moral 
upbringing, and, among Chilean Protestants, generally, absten- 
tion from alcohol, these segments of the non-Catholic Chilean so- 
ciety had little in common with the broader anticlerical groups. 
In fact, on many moral issues, non-Catholics' opinions were much 
closer to those of practicing Roman Catholics. For this reason, 
although practicing Protestants and Jews tended to vote for the more 
secular parties in greater proportions than other groups, they gener- 
ally did not have a particularly strong political identity or play im- 
portant leadership roles in political or social life. 

In 1925 President Arturo Alessandri Palma (1920-24, 1925, 
1932-38) pressed for and obtained a separation of church and state. 
This resolved most sources of church-state friction, but more than 
a century of conflicts had already created subcultures in Chilean 



123 



Chile: A Country Study 

society that continued to leave their mark on twentieth-century 
educational institutions, intellectual life, social organizations, and 
politics. The segments most distant from and even opposed to the 
Catholic Church were receptive to positivism (see Glossary) and, 
especially after the 1930s, to Marxism. In this sense, the nineteenth- 
century fault line contributed indirectly to the eventual appeal 
among educated Chileans of the nation's communist and socialist 
parties. 

During the interwar years, partly in response to the challenges 
of secular intellectuals and political leaders and partly as a result 
of new trends in international Catholicism, the Roman Catholic 
Church in Chile slowly began to espouse socially and politically 
more progressive positions. This more progressive Catholicism in- 
itially had its main impact among university students, who, in the 
mid- 1930s under the leadership of Eduardo Frei, created a new 
party that in 1957 fused with other groups to become the Christian 
Democratic Party (Partido Democrata Cristiano — PDC). This de- 
velopment split the subculture that was closer to the Catholic Church 
into politically conservative and centrist segments. By the early 
1960s, a solid majority of the church hierarchy favored the Chris- 
tian Democrats, and there was a significant shift of voter support 
from the Conservative Party (Partido Conservador) to the PDC. 
Following the new thinking in church circles, the hierarchy open- 
ly embraced positions favoring land reform, much to the dismay 
of the still-important minority of Catholics on the right. 

The dominant consensus within Chilean Catholicism was much 
in tune with the resolutions and spirit of Vatican Council II 
(1962-65) in theological, ritual, and pastoral matters. Within the 
Latin American context, the Chilean Roman Catholic Church 
quickly became noted as a post- Vatican Council II church of moder- 
ately progressive positions on political and socioeconomic issues, 
and its representatives played an important part in the reform- 
minded Medellin (1968) and Puebla (1979) conferences of Latin 
American bishops. In the late 1960s and 1970s, the church fostered 
the establishment of Christian Base Communities (Comunidades 
Eclesiasticas de Base — CEBs; see Glossary) in poor urban neigh- 
borhoods. However, only a minority in the Chilean church sub- 
scribed to what became known as liberation theology (see Glossary). 

In the wake of the military coup of September 1973, the church 
established, initially in association with some leaders of the nation's 
Protestant and Jewish communities, an office for the defense of 
human rights. Later reorganized under exclusive sponsorship of 
the archdiocese of Santiago as the Vicariate of Solidarity (Vicaria 
de la Solidaridad), this organization continued to receive funds from 



124 



The Society and Its Environment 



international Protestant sources and valiantly collected informa- 
tion on human rights violations during the nearly seventeen years 
of military rule. Its lawyers presented literally thousands of writs 
of habeas corpus, in all but a few cases to no avail, and provided 
for the legal defense of prisoners. The church also supported popular 
and labor organizations and called repeatedly for the restoration 
of democracy and for national reconciliation. 

As the papacy of John Paul II (1978- ) progressed, the Chilean 
Catholic Church, like other national congregations around the 
world, became somewhat more conservative in outlook. In the early 
1990s, the episcopal conference was about evenly split between those 
formed in the spirit of Vatican Council II and those espousing more 
conservative positions. However, this shifting balance did not af- 
fect the church's advocacy of human rights and democracy during 
the military regime (see The Church, ch. 4). 

Forms of Popular Religiosity 

Anthropologists of religion would be hard-pressed to find expres- 
sions of indigenous beliefs in the "popular" sectors (see Glossary) 
of Chile. The principal exception to this is in the north, where var- 
ious religious festivals honoring the Virgin Mary show bold traces 
of highland Andean indigenous beliefs. The most noted of these 
is "La Tirana," held each July in Iquique and the nearby village 
of La Tirana. In the rest of the country, Christian and indigenous 
religious syncretism have been largely confined to native Ameri- 
can communities, where faiths in various animal and bird spirits 
coexist with beliefs of Christian origin. 

Popular religious beliefs focus to a large extent on the notion 
that there is a struggle between good and evil, the latter seen as 
a force personified by the devil. This perspective is much in line 
with Mapuche beliefs. Illnesses are often seen, like sin, as tied in 
some way to the devil's work. Catholic priests in poor parishes 
usually have had the experience of being called by their least edu- 
cated parishioners to perform exorcisms, particularly of demons 
thought to be afflicting sick children, and many Pentecostal ser- 
vices focus on ridding body and soul of satanic influences and on 
faith healing. A belief in heaven and in the eternal horrors of hell 
is a fundamental ingredient of the popular religious imagery, with 
earthly life said to be a brief trial determining the soul's final des- 
tination. Much of the message of Pentecostal sermons revolves 
around these concepts, focusing on the weakness of the flesh and 
on the necessity of leading a life of constant preparation for eter- 
nal deliverance. In this respect, there is a puritan streak to the Pen- 
tecostal message that is reinforced through a liberal use of individual 



125 




126 



A dance at a religious festival held each July in Iquique and the nearby 
village of La Tirana in honor of the Virgin Mary 
Courtesy Embassy of Chile, Washington 



127 



Chile: A Country Study 

testimonies of repentance and conversion from members of the con- 
gregation. Among Catholics, this element of popular religios- 
ity is tied intimately to a belief in the intercession of saints and, 
most important, of the Virgin Mary. Intercession may be invoked 
on behalf of deceased family members who are remembered in 
prayers. 

The afterworld is heavily populated in popular religious imagery 
by errant souls atoning for their sins and seeking their final rest. 
Particularly in rural areas, it is common along roadsides to see 
niches carved into the sides of hills or shaped from clay that con- 
tain crosses, occasionally photographs, and candles. The niches are 
in the proximity of places where people met sudden, violent deaths, 
primarily from traffic accidents, without the benefit of last rites. 
The candles are lit mainly to plead for their souls but also in some 
cases to ask the deceased to intercede for those who light them. 
It is customary among the Chilean poor to believe that infants who 
die become little angels. Pilgrimages to Catholic churches that house 
special images of the Virgin or of saints and multitudinous proces- 
sions in which these images are displayed are also part of the popular 
religious landscape. The faithful frequently offer penances in the 
hope of obtaining special favors. 

A central objective of Pentecostal services is to experience a 
manifestation of the Holy Spirit. The leader of the service tries to 
cleanse the congregation of devilish influences and to prepare the 
way for this manifestation. Between his or her invocations stress- 
ing the necessity and possibility of redemption from sin and anoint- 
ments of the sick, the congregation joins in rhythmic but often 
lamentational singing, sometimes to the accompaniment of gui- 
tars and tambourines, and often supplemented by the clapping of 
hands. While singing, some of the women who attend will frequently 
begin to dance, swaying back and forth, and even to "speak in 
tongues." Sometimes the dancing will surround certain individu- 
als who are chosen because they need special attention for some 
reason. Another common practice is for members of the congre- 
gation to pray individually in a loud voice. 

Attitudes Toward Family and Gender 

Divorce, Abortion, and Contraception 

Chile is one of the last countries in the world that has not legal- 
ized divorce. A law permits marital separation under certain con- 
ditions, but it does not terminate the conjugal bond. Despite the 
Catholic hierarchy's opposition to the legalization of divorce, at 
least half of all Chileans apparently favor enacting such a law (see 



128 



The Society and Its Environment 

table 17, Appendix). In the 1990 CEP-Adimark survey, 55.6 per- 
cent of those interviewed were in favor of legal divorce. 

The differences of opinion on divorce among various categories 
of the population are noteworthy. Support for its legalization is 
slightly stronger among men than among women. It is much 
stronger among young adults than among the middle-aged, while 
only a minority of older people support it. High-income respon- 
dents constitute the group most in favor, whereas lower-income 
respondents largely disapprove (70.1 percent to 15.5 percent); a 
small majority of those with middle and lower incomes support 
legalization. A slight majority of self- identified Catholics are in 
favor, but among practicing Catholics a majority reject the notion. 
A small majority of those who said they are Protestant reject legali- 
zation. This rejection is stronger among weekly churchgoers. Cu- 
riously, Protestants (mainly Pentecostals, who tend to have very 
traditional opinions) are closer to the positions of the Catholic hi- 
erarchy than are Catholic respondents. 

Although Chile does not have a divorce law, a surrogate and 
well-institutionalized means of severing conjugal bonds is the an- 
nulment of civil marriages. Civil marriage ceremonies are the only 
legally valid ones, and couples who have church weddings must 
also marry at the civil registry. The annulment is usually done with 
the assistance of attorneys who argue that there has been some 
procedural error in the civil marriage process. It often involves 
obtaining witnesses who would attest to facts, whether true or false, 
that vitiate the original proceedings, such as asserting that the couple 
does not reside where they said they did when they were married. 
This is enough to make a case for invalidating the action of the 
civil registrar who performs the ceremony and draws up the papers. 
To a large extent, Chile's lack of a proper divorce law can be at- 
tributed to the ability of separated couples to annul their marriage 
following these procedures. As a result, the political pressure to 
enact a divorce law is diffused. In 1991, the latest year for which 
there were published figures, there were 5,852 marriage annulments 
(and 91 ,732 marriages) in the country; the number of annulments 
showed a steady increase over seven years from a level of 3,987 
in 1984. The actual number of separations of married couples is 
much higher, especially among those who lack the means to hire 
the necessary annulment lawyers. New bonds are often established 
outside of wedlock. 

Whereas the Chilean public seems somewhat favorably inclined 
toward the legalization of divorce, it shows considerable resistance 
to legal abortion. Although survey results vary, according to the way 
questions on abortion are posed, the notion of permitting abortion 



129 



Chile: A Country Study 

on demand has only a small proportion of supporters. It varied 
from 5 percent in the CEP-Adimark December 1990 survey to a 
high of 22.4 percent in the July 1991 survey conducted by the Center 
for Contemporary Reality Studies (Centro de Estudios de la 
Realidad Contemporanea — CERC). However, a relatively large 
proportion of survey respondents favored abortion under certain 
circumstances. The CERC survey of July 1991 showed that 76 per- 
cent considered abortion permissible when "the mother's life is 
in danger or when the baby will be born with malformations"; simi- 
larly, 53.4 percent thought that abortion should be permitted in 
cases of rape. While nearly half of all respondents rejected abor- 
tion in all circumstances, 44.7 percent would permit it with qualifi- 
cations (see table 18, Appendix). 

There is a considerable degree of consensus among the various 
categories of respondents to a December 1991 CEP-Adimark sur- 
vey, except for individuals of high socioeconomic status and prac- 
ticing Catholics or Protestants. As on the issue of divorce, the first 
group had the most liberal views of all, with only 14 percent agreeing 
with the notion that abortion should not be permitted and 78 per- 
cent accepting it in qualified circumstances. Practicing Catholics 
rejected abortion in a somewhat greater proportion than the aver- 
age, and they accepted it in qualified circumstances to a slightly 
lesser extent. Practicing Protestants (mainly Pentecostals) had the 
most restrictive views of all: more than 80 percent rejected abor- 
tion outright, 17.6 accepted it in qualified circumstances, and a 
tiny fraction agreed that the matter should be left up to the individu- 
al woman. Although illegal, abortions are commonly performed 
in Chile. Social science researchers have estimated that about a 
third of all Chilean women have one or more induced abortions 
during their childbearing years. 

Birth control methods of all types find broad acceptance among 
the population. This is true even of practicing Catholics, 81.3 per- 
cent of whom found their use acceptable. National health programs 
have facilitated access to birth control since the 1960s, and the use 
of contraceptives is widespread. However, these programs provide 
easy access to birth control only to women who have already had 
at least one child because the programs are mainly organized to 
provide prenatal and postpartum primary care. Birth control is 
therefore more difficult to obtain for childless women, especially 
younger and poorer women. Thus, first pregnancies out of wed- 
lock as well as first marriages of pregnant brides are frequent. This 
differential in contraceptive practices is largely responsible for the 
fact that the proportion of births out of wedlock over the total num- 
ber of births increased with the overall decline in the birthrate (see 



130 



The Society and Its Environment 

table 19, Appendix). The number of births in wedlock has fallen 
almost by half since the initiation of the contraception programs, 
while the births out of wedlock have remained fairly constant. This 
means that currently a third of all births are out of wedlock, up 
from 17.5 percent in 1965. 

Premarital sex among couples in love with each other is also 
broadly accepted, except among practicing Protestants, only 40 per- 
cent of whom approved, and among those age fifty-five and older, 
only 39 percent of whom approved. Sixty-three percent of practic- 
ing Catholics accepted this practice, despite the strong disapproval 
of the church hierarchy. On this issue, practicing Protestants again 
are closer to the Catholic hierarchy's teachings than are lay Catholics 
themselves. The acceptance of premarital relations compounds the 
problems caused by the relatively more difficult access to birth con- 
trol for childless women. 

Family Structure and Attitudes Toward Gender Roles 

Extended-family life has occupied an important place in Chilean 
society. Although couples are expected to set up their own house- 
holds, they remain in close contact with the members of their larger 
families. Children generally get to know their cousins well, as much 
adult leisure time, generally on weekends and holidays, is spent 
in the company of relatives. It is also common to find children liv- 
ing for extended periods of time for educational or other reasons 
in households headed by relatives, sometimes even cousins of their 
parents. These extended-family ties provide a network of support 
in times of nuclear family crises. It is also common for close friend- 
ships among adults to lead to links that are family-like. For exam- 
ple, children often refer to their parents' friends as "uncle" or 
"aunt." 

Traditional definitions of gender roles have broken down con- 
siderably as women have won access to more education and have 
entered the labor force in larger numbers. By 1990 about half the 
students in the nation's primary and secondary schools were fe- 
male; the proportion of women was lower, about 44 percent of the 
total enrollment in all forms of higher education. The University 
of Chile graduated Latin America's first female lawyers and phy- 
sicians in the 1880s. However, women made faster progress in tradi- 
tionally female professions than in other professions. Thus, by 1910 
there were 3,980 women teachers, but there were only seven phy- 
sicians, ten dentists, and three lawyers. By the 1930s, female en- 
rollments reached significant numbers in these fields. The 
University of Chile in 1932 had 124 female students enrolled in 
law (17 percent of the total), ninety-six in medicine (9.5 percent), 



131 



Chile: A Country Study 



and 108 in dentistry (38 percent), although 55 percent of all women 
students at the university were enrolled in education. 

Attitudes regarding the proper roles of men and women in soci- 
ety seemingly no longer follow a fully traditional pattern. A 1984 
survey conducted in Santiago by the Diagnos polling firm found 
widespread support among men (more than 80 percent) and women 
(more than 90 percent) of high, medium, and low socioeconomic 
status for the notion that women benefit as individuals if they work 
outside the home. When asked if they agreed or disagreed with 
the notion that "it is better for women to concentrate on the home 
and men on their jobs," 43 percent of the national sample in the 
CERC July 1991 survey agreed, even though the term "concen- 
trate" does not imply a denial of the right of women to work out- 
side the home. There were some differences between the genders 
over this question, with 49 percent of men and 38 percent of women 
in agreement. The percentage in favor of this notion increased with 
age. Only 30 percent of those under age twenty-five agreed, while 
61 percent of those over age sixty-one did so. 

Men and women in the same CERC study were considerably 
divided over whether "women should obey their husbands." This 
is a sentence included in family law that is supposed to be read 
(although it is frequentiy omitted) to Chileans when they take their 
marriage vows in the civil registry's ceremony; 55 percent of men 
agreed, while only 40 percent of women did so. Again, men held 
the more traditional views, but considering the nature of the propo- 
sition and its long-established status in civil law, the fact that only 
slightly more than half of them agreed can be considered a sign 
of changing times. 

Surveys of working-class respondents can usually be counted on 
to capture the more traditional views of urban society toward male 
and female roles because such attitudes are usually associated with 
lower levels of educational attainment. But working-class Chileans 
are in general not as tradition minded as could be expected about 
the issue of women working outside the home. In a 1988 survey 
of workers, 70 percent of the men and 85 percent of the women 
agreed with the notion that "even if there is no economic necessi- 
ty, it is still convenient for women to work." The notion that "men 
should participate more actively in housework so that women are 
able to work" was accepted by 70 percent of men and 92 percent 
of women. Forty-five percent of men believed that "women who 
work gravely neglect their home obligations," while 21 percent of 
women did so. However, male support for the notion of women 
working outside the home varied depending on the way the ques- 
tion was phrased. When interviewers presented the idea that "if 



132 



The Society and Its Environment 



men were to make more money, then women should return to the 
home," 63 percent of men agreed, while only 33 percent of wom- 
en did. 

Nonetheless, popular beliefs hold very strongly to the notion that 
women reach full self-realization primarily through motherhood. 
This generates strong pressures on women to have children, 
although most take the necessary measures to have fewer children 
than did their mothers and especially their grandmothers. Employed 
working-class women usually are able to find preschools and day 
care for their small children, as these programs are broadly estab- 
lished throughout the country. The extended family also provides 
a means of obtaining child care. 

Middle-class to upper-class households usually hire female domes- 
tic servants to do housework and take care of children. This prac- 
tice facilitates the work life of the women of such households. 
Women can frequently be found in the professions even outside 
such traditionally female-dominated areas as primary and second- 
ary education, nursing, and social work. For example, among the 
nation's 14,334 physicians in 1990, there were 3,811 women, or 
27 percent of the total. This percentage has been increasing in re- 
cent years. Among the 7,616 physicians less than thirty-five years 
of age, there were 2,778 women, or 37 percent of the total. In 1991 
about 48 percent of the nation's 748 judges were women; although 
there were none on the Supreme Court, 24.2 percent of the appel- 
late court judges were women. A slight majority of the roughly 4,200 
journalists in the country were women. 

Whither Chile? 

In the early 1990s, most social, economic, and political leaders 
are being driven by a search for consensus on pragmatic solutions 
to national problems. The strength of these attitudes stems in large 
measure from an attempt to recover from what most Chileans view, 
in one sense or another, as national failures. The country ex- 
perienced slow and erratic growth, hyperinflation, the breakdown 
of its democracy, human rights abuses, the exile of many people, 
and a period of harsh economic adjustment under military govern- 
ment. Chileans hope to put these events behind them, and to do 
so with a new sense of unity and purpose, avoiding cosdy mistakes 
and unnecessary conflicts. 

The nation's transition to democracy was a smooth one, thanks 
in large part to the new national mood favoring negotiations and 
consensus. But many challenges lie ahead. The objective of con- 
tinuing rapid development while increasing equity and enhancing 
democratic governance is indeed a tall order. However, buoyed 



133 



Chile: A Country Study 

by high levels of growth and historically low levels of unemploy- 
ment, a majority of Chileans view the future optimistically. 

Since the early 1970s, Chilean social scientists have been active 
in studying virtually all aspects of their society. The most compre- 
hensive, useful, and authoritative source on Chilean physical and 
human geography is Geografia general y regional de Chile by Ximena 
Toledo O. and Eduardo Zapater A. The book is best complemented 
by the latest edition of the Compendio estadistico of Chile's Instituto 
Nacional de Estadisticas, which provides a summary of the most 
commonly consulted statistics. The political characteristics of the 
various regions of the country are treated in Cesar N. Caviedes's 
The Politics of Chile. 

Consistent with the relative unimportance of ethnic divisions in 
the Chilean population, there are no significant studies of the na- 
tion's ethnic groups, except for the Mapuche. The best source for 
an examination of their culture and social organization is Louis 
C. Faron's The Mapuche Indians of Chile. A wealth of recent infor- 
mation on the Mapuche can be found in Censo de reducciones indtge- 
nas seleccionadas, edited by Jorge Martinez. 

The best single work on the current situation in the countryside 
is Sergio Gomez and Jorge Echenique's La agricultura chilena. An 
examination of the countryside at the height of agrarian reform 
is Solon Lovett Barraclough and Jose Antonio Fernandez's Diag- 
nostic de la reforma agraria chilena. A useful collection of articles cover- 
ing the period from the 1950s to the early 1990s is contained in 
Development and Social Change in the Chilean Countryside, edited by 
Cristobal Kay and Patricio Silva. 

There is a growing body of literature on Chilean social policies, 
welfare institutions, and social-assistance programs. The best works 
are Jose Pablo Arellano's Politicas sociales y desarrollo, which provides 
an excellent overview of the welfare institutions since their incep- 
tion; Pilar Vergara's Politicas hacia la extrema pobreza en Chile, 1973- 
1988, which examines the military government's programs to as- 
sist the poorest segments of the population; Tarsicio Castafieda's 
Para combatir la pobreza, which covers some of the same ground as 
Vergara but from the perspective of a supporter of the military 
government; Hernan Cheyre Valenzuela's La prevision en Chile, ayer 
y hoy and Augusto Iglesias P. and Rodrigo Acuna R.'s Sistema de 
pensiones en America Latina, Chile, both of which examine the new 
private pension system and its social and economic effects; and Jorge 
Jimenez de lajara's Chile: Sistema de saluden transicion a la democracia, 



134 



The Society and Its Environment 



which is comprehensive in its analysis of the various components 
of the health system. 

Guillermo Campero's Los gremios empresariales en el periodo 1970- 
1983 is the most comprehensive examination of entrepreneurial 
associations. A more recent analysis of entrepreneurs is Cecilia 
Montero's "La evolucion del empresariado chileno." Alan An- 
gell's Politics and the Labour Movement in Chile remains the best source 
for examining the composition of the twentieth-century labor move- 
ment prior to the military government. The labor movement dur- 
ing the 1980s is well treated in Patricio P. Fnas's El movimiento 
sindical chileno en la lucha por la democracia, 1973-1988. 

The best single work on the Roman Catholic Church is Brian 
H. Smith's The Church and Politics in Chile. The Catholic Church 
during the military regime is the object of Enrique Correa and Jose 
Antonio Viera-Gallo's Iglesia y dictadura. A brief but excellent ex- 
amination of the growth of Protestantism, including a comparison 
of the social and political attitudes of practicing Protestants and 
Catholics, is Arturo Fontaine Talavera and Herald Beyer's "Retra- 
to del movimiento evangelico a la luz de las encuestas de opinion 
publica." The development of religious life in Chile and the rela- 
tions between the military regime and all religious groups, espe- 
cially Protestants, is the subject of Humberto Lagos Schuffeneger's 
Crisis de la esperanza. 

The most comprehensive single analysis of women in Chilean 
society continues to be Felfcitas Klimpel's La mujer chilena. Paz 
Covarrubias and Rolando Franco's Chile: Mujer y sociedad covers 
virtually all aspects of women's involvement in society with its thirty- 
two separate articles. Teresa Valdes's Venid benditas de mi padre pro- 
vides a useful in-depth look at the life of twenty-six popular-sector 
women. (For further information and complete citations, see Bib- 
liography.) 



135 



Chapter 3. The Economy 




A series of textile figures (lukutuel) >m a seventeenth-eentury Mapuehe 
woman's belt called nimintrariiwe 



CHILE'S ECONOMY ENJOYED a remarkable boom in the early 
1990s, the result of a comprehensive transformation that began in 
1974 with the adoption of free-market economic policies. Between 
the 1930s and the early 1970s, the Chilean economy was one of 
the most state-oriented economies in Latin America. For decades, 
it was dominated by the philosophy of import-substitution indus- 
trialization (see Glossary). Heavily subsidized by the government, 
a largely inefficient industrial sector had developed. The sector's 
main characteristics were a low rate of job creation, a virtual ab- 
sence of nontraditional exports, and a general lack of growth and 
development. In the early 1970s, the ruling socialist-communist 
Popular Unity (Unidad Popular) coalition of President Salvador 
Allende Gossens (1970-73) attempted to implement a socialist eco- 
nomic system. The Allende experiment came to an end with the 
military coup of September 1 1 , 1973. From that point on, Chile's 
economic policies took a radical turn, as the military government 
undertook, first timidly and later more confidently, deep reforms 
aimed at creating a market economy. 

In the early 1990s, politicians and analysts from around the world 
looked to the Chilean economy for lessons on how to open up inter- 
national trade, create dynamic capital markets, and undertake an 
aggressive privatization process. In early 1994, Chile had the strong- 
est economic structure in Latin America and, in large part because 
of the military government's reforms, was emerging as a modern 
economy enjoying vigorous growth. Moreover, there seemed to 
be a consensus among politicians of widely varying beliefs that the 
existing economic model should be maintained in the future. 

Chile's income per capita, approximately US$2,800, placed the 
nation squarely in the middle of what the World Bank (see Glos- 
sary) calls "middle-income economies." Of the Latin American 
nations, Brazil, Uruguay, Venezuela, Mexico, and Argentina in 
1990 each had a higher gross national product (GNP — see Glos- 
sary) per capita than Chile; the rest had a lower level. In the 1991-93 
period, the rate at which Chile's gross domestic product (GDP — 
see Glossary) grew exceeded 6.5 percent per year, making Chile's 
GDP during these years by far the fastest growing in Latin America. 
In 1992 GDP grew at a record 10.3 percent pace, year-end unem- 
ployment was down to 4.5 percent, real wages were up 5 percent, 
inflation was down to 12.7 percent, and the public-sector surplus 
was equivalent to 3 percent of GDP. When a longer period is 



139 



Chile: A Country Study 

considered, Chile still comes up ahead of the rest of the Latin Ameri- 
can nations. For instance, according to the United Nations Econo- 
mic Commission for Latin America and the Caribbean (Comision 
Economica para America Latina y el Caribe; see Glossary), Chile's 
GDP per capita increased by 32.2 percent between 1981 and 1993; 
Colombia was a distant second with an accumulated rate of growth 
during the period of 23.6 percent. 

The success Chile enjoyed by the 1990s resulted largely from 
the boom in agricultural exports. In 1970 Chile exported US$33 
million in agricultural, forestry, and fishing products; by 1991 the 
total had jumped to US$1.2 billion. This figure excluded those 
manufactured goods based on products of the agricultural, livestock, 
and forestry sectors. Much of the increased agricultural produc- 
tion in the country was the result of rapidly improving yields and 
higher productivity, spurred by an export-oriented policy. 

There was little doubt that an exchange-rate policy aimed at en- 
couraging exports lay behind the strong performance of the Chilean 
economy in the 1986-91 period. First, the liberalization of inter- 
national trade substantially lowered the costs of imported agricul- 
tural inputs and capital goods, enabling the sector to become more 
competitive. In fact, the liberalization of international trade put 
an end to a long history of discrimination against agriculture. Tariffs 
and other forms of import restrictions throughout the 1950s and 
1960s gave a relative advantage to those industries that produced 
importable goods, making them domestically competitive at produc- 
tion costs above international prices. The same policies, because 
they permitted an overvalued exchange rate, punished those eco- 
nomic activities, like agriculture, that could produce exportable 
goods. While those goods could be sold at international prices, the 
foreign-exchange earnings would be converted into domestic cur- 
rency at an unfavorable exchange rate. Second, the exchange-rate 
policy, pursued aggressively since 1985, had provided incentives 
for the expansion of exports. 

Third, an institutional framework that secured property rights 
to land and water, along with reformed labor laws, had increased 
the openness of factor markets (see Glossary) and established clear 
signals for the allocation of resources. Potential profits in new busi- 
ness initiatives had by then become very much tied to internation- 
al prices of goods and domestic costs of resources. The likelihood 
of government intervention in property rights allocation, prohibi- 
tions, special permits, and so forth had been significantly reduced. 
Related reforms in the transportation sector, particularly in air and 
marine transport, had further increased access to international 
trade. 



140 



The Economy 



A fourth fundamental policy-based explanation of the increase 
in agricultural exports was the pursuit of a stable macroeconomic 
policy whose purpose was to give entrepreneurs confidence in the 
system and enable them to plan their activities over the longer term. 
Many of the export-oriented agricultural activities required siza- 
ble investments that could only be undertaken in an environment 
of stability and policy continuity. What is most remarkable, per- 
haps, is that since 1989 poverty and inequality have been reduced 
significantly. 

Evolution of the Economy 
The Colonial Era to 1950 

In colonial times, the segmentation of Chile into latifundios (see 
Glossary) left only small parcels for native American and mestizo 
(see Glossary) villagers to cultivate. Cattle raised on the latifun- 
dios were a source of tallow and hides, which were sent, via Peru, 
to Spain. Wheat was Chile's principal export during the colonial 
period. From the inquilinos (peons), indentured to the encomenderos 
(see Glossary), or latifundio owners, to the merchants and encomen- 
deros themselves, a chain of dependent relations ran all the way to 
the Spanish metropolis (see The Colonial Economy, ch. 1). 

After Chile won its independence in 1818, the economy prospered 
through a combination of mercantilist and free-market policies. 
Agricultural exports, primarily wheat, were the mainstay of the 
export economy. By mid-century, however, Chile had become one 
of the world's leading producers of copper. After Chile defeated 
Bolivia and Peru in the War of the Pacific (1879-83), nitrate mines 
in areas conquered during the war became the source of huge 
revenues, which were lavished on imports, public works projects, 
education, and, less directly, the expansion of an incipient indus- 
trial sector (see The Liberal Era, 1861-91, ch. 1). Between 1890 
and 1924, nitrate output averaged about a quarter of GDP. Taxes 
on nitrate exports accounted for about half of the government's 
ordinary budget revenues from 1880 to 1920. By 1910 Chile had 
established itself as one of the most prosperous countries in Latin 
America. 

Dependence on revenues from nitrate exports contributed to 
financial instability because the size of government expenditures 
depended on the vagaries of the export market. Indeed, Chile was 
faced with a severe domestic crisis when the nitrate bonanza end- 
ed abruptly during World War I as a result of the invention of syn- 
thetic substitutes by German scientists. Gradually, copper replaced 
nitrates as Chile's main export commodity. Using new technologies 



141 



Chile: A Country Study 



that made it feasible to extract copper from lower-grade ores, United 
States companies bought existing Chilean mines for large-scale de- 
velopment. 

Chile initially felt the impact of the Great Depression (see Glos- 
sary) in 1930, when GDP dropped 14 percent, mining income 
declined 27 percent, and export earnings fell 28 percent. By 1932 
GDP had shrunk to less than half of what it had been in 1929, ex- 
acting a terrible toll in unemployment and business failures. The 
League of Nations (see Glossary) labeled Chile the country hardest 
hit by the Great Depression because 80 percent of government 
revenue came from exports of copper and nitrates, which were in 
low demand. 

Influenced profoundly by the Great Depression, many national 
leaders promoted the development of local industry in an effort to 
insulate the economy from future external shocks. After six years 
of government austerity measures, which succeeded in reestablishing 
Chile's creditworthiness, Chileans elected to office during the 
1938-58 period a succession of center and left-of-center govern- 
ments interested in promoting economic growth by means of 
government intervention. 

Prompted in part by the devastating earthquake of 1939, the 
Chilean government created the Production Development Corpo- 
ration (Corporacion de Fomento de la Produccion — Corfo) to en- 
courage with subsidies and direct investments an ambitious program 
of import-substitution industrialization. Consequently, as in other 
Latin American countries, protectionism became an entrenched 
aspect of the Chilean economy. 

Import-substitution industrialization was spurred on by the ad- 
vent of World War II and the loss of access to many imported 
products. State enterprises in electric power, steel, petroleum, and 
other heavy industries were also created and expanded during the 
first years of the industrialization process, mostiy under the guidance 
of Corfo, and the foundations of the manufacturing sector were 
set. Between 1937 and 1950, the manufacturing sector grew at an 
average yearly real rate of almost 7 percent. 

Despite initially impressive rates of growth, import-substitution 
industrialization did not produce a sustainable expansion of the 
manufacturing sector. With the industrialization process evolved 
an array of restrictions, controls, and often contradictory regula- 
tions. With time, consumer-oriented industries found that their 
markets were limited in a society where a large percentage of the 
population was poor and where many rural inhabitants lived at 
the margins of the money economy. The economic model did not 
generate a viable capital goods (see Glossary) industry because firms 



142 



Survivors of the March 1985 earthquake in central Chile stand among 
the ruins of their homes in the Santo Domingo area of Santiago. 

Courtesy Inter-American Development Bank 

relied on imports of often outmoded capital and intermediate goods. 
Survival often depended on state subsidies or state protection. In 
fact, it was because of these import restrictions that many of the 
domestic industries were able to survive. For example, a number 
of comparative studies have indicated that Chile had one of the 
highest, and more variable, structures of protection in the develop- 
ing world. As a consequence, many, if not most, of the industries 
created under the import- substitution industrialization strategy were 
inefficient. Also, it has been argued that this strategy led to the 
use of highly capital-intensive (see Glossary) production, which, 
among other inefficiencies, hampered job creation. Additionally, 
the import-substitution industrialization strategy generated an 
economy that was particularly vulnerable to external shocks. 

During the import-substitution industrialization period, copper 
continued to be the principal export commodity and source of 
foreign exchange, as well as an important generator of government 
revenues. The Chilean government's retained share of the value 
of copper output increased from about one-quarter in 1925 to over 
four-fifths in 1970, mainly through higher taxes. Although protec- 
tionist policies better insulated Chile from the occasional shocks of 
world commodities markets, price shifts continued to take their toll. 



143 



Chile: A Country Study 

Economic Policies, 1950-70 

Between 1950 and 1970, the Chilean economy expanded at mea- 
ger rates. GDP grew at an average rate of 3.8 percent per annum, 
whereas real GDP per capita increased at an average yearly rate of 
1 .6 percent. Over this period, Chile's economic performance was the 
poorest among Latin America's large and medium-size countries. 

As in most historical cases, Chile's import-substitution indus- 
trialization strategy was accompanied by an acute overvaluation 
of the domestic currency that precluded the development of a 
vigorous nontraditional (that is, noncopper) export sector. Although 
some agrarian reform was attempted, the government increas- 
ingly resorted to control-ling agricultural prices in order to sub- 
sidize the urban working and middle classes. The agricultural 
sector was particularly harmed by the overvaluation of Chile's cur- 
rency. The lagging of agriculture became, in fact, one of the most 
noticeable symptoms of Chile's economic problems of the 1950s 
and 1960s. Over this period, manufacturing and mining, mainly 
of copper, significantly increased their shares in total output. 

By the early 1960s, most of the easy and obvious substitutions 
of imported goods had already been made; the process of import- 
substitution industrialization was rapidly becoming less dynamic. 
For example, between 1950 and 1960 total real industrial produc- 
tion grew at an annual rate of only 3.5 percent, less than half the 
rate of the previous decade. 

During the 1950s, inflation, which had been a chronic problem 
in Chile since at least the 1880s, became particularly serious; the 
rate of increase of consumer prices averaged 36 percent per an- 
num during the decade, reaching a peak of 84 percent in 1955. 
The main source of the inflationary pressure on the Chilean econ- 
omy was a remarkably lax fiscal policy. Chile's economic history 
has been marked by failed attempts to curb inflation. During the 
1950s and 1960s, three major stabilization programs, one in each 
administration, were launched. The common aspect of these ef- 
forts was the emphasis placed on tackling the various consequences 
of inflationary pressures, such as prices, wages, and exchange-rate 
increases, rather than the root cause of money growth, the moneti- 
zation of the fiscal deficit. In spite of the efforts of presidents Carlos 
Ibanez del Campo (1927-31, 1952-58) and Jorge Alessandri 
Rodriguez (1958-64), inflation averaged 31 percent per annum dur- 
ing these two decades. In 1970, the last year of the government 
of President Eduardo Frei Montalva (1964-70), the inflation rate 
stood at 35 percent. 



144 



The Economy 



During the 1960s, and especially during the Frei administration, 
some efforts to reform the economy were launched. These included 
an agrarian reform, a limited liberalization of the external sector, 
and a policy of minidevaluations aimed at preventing the erosion 
of the real exchange rate. Under the 1962 Agrarian Reform Law, 
the Agrarian Reform Corporation (Corporacion de Reforma 
Agraria — Cora) was created to handle the distribution, but land 
reform proved to be slow and expensive. In spite of these and other 
reforms, toward the end of the 1960s it appeared that the perfor- 
mance of the economy had not improved in relation to the previous 
twenty years. Moreover, the economy was still heavily regulated. 

The Popular Unity Government, 1970-73 

In September 1970, Salvador Allende, the Popular Unity can- 
didate, was elected president of Chile. Over the next three years, 
a unique political and economic experience followed. Popular Unity 
was a coalition of left and center-left parties dominated by the So- 
cialist Party (Partido Socialista) and the Communist Party of Chile 
(Partido Comunista de Chile — PCCh), both of which sought to 
implement deep institutional, political, and economic reforms. 
Popular Unity's program called for a democratic "Chilean road 
to socialism" (see Salvador Allende's Leftist Regime, 1970-73, 
ch. 1). 

When Allende took office in November 1970, his government 
faced a stagnant economy weakened by inflation, which hit a rate 
of 35 percent in 1970. Between 1967 and 1970, real GDP per cap- 
ita had grown only 1.2 percent per annum, a rate significantly be- 
low the Latin American average. The balance of payments (see 
Glossary) had shown substantial surpluses during all but one of 
the years from 1964 to 1970, and, at the time Popular Unity took 
power, the Central Bank of Chile (see Glossary) had a stock of in- 
ternational reserves of approximately US$400 million. 

Popular Unity had a number of short-run economic objectives: 
initiating structural economic transformations, including a program 
of nationalization; increasing real wages; reducing inflation; spur- 
ring economic growth; increasing consumption, especially by poorer 
people; and reducing the economy's dependence on the rest of the 
world. The nationalization program was to be achieved by a com- 
bination of new legislation, requisitions, and stock purchases from 
small shareholders. The other goals — output and increased con- 
sumption, with rising salaries and declining inflation — were to be 
accomplished by a boost in aggregate demand, mainly generated 
by higher government expenditures, accompanied by strict price 
controls and measures to redistribute income. 



145 



Chile: A Country Study 



Allende's macroeconomic program was based on several key as- 
sumptions, the most important being that the manufacturing sec- 
tor had ample underutilized capacity. This provided the theoretical 
basis for the belief that large fiscal deficits would not necessarily 
be inflationary. The lack of full utilization was, in turn, attributed 
to two fundamental factors: the monopolistic nature of the manufac- 
turing industry and the structure of income distribution. Based on 
this diagnosis, it was thought that if income were redistributed 
toward the poorer groups through wage increases and if prices were 
properly controlled, there would be a significant expansion of de- 
mand and output. 

In regard to inflation, the Popular Unity program placed blame 
on structural rigidities (namely, slow or no response of quantity 
supplied to price increases), bottlenecks, and the role of monopolistic 
pricing, and it played down the role of fiscal pressures and money 
creation. Little attention was paid to the financial sector, given the 
orientation of the new regime's economic technocrats toward the 
import-substitution industralization, structuralist philosophy of the 
Economic Commission for Latin America. In fact, Allende's mini- 
ster of foreign relations and vice president, Clodomiro Almeyda, re- 
lates in his memoirs how in the first postelection meeting of the 
economic team, these technocrats argued expressly and convincingly 
that monetary and financial management did not deserve too much 
attention. Alfonso Inostroza, the Central Bank president, stated 
in early 1971 that the main objective of the monetary policy was 
to "transform it into a key instrument ... to achieve the com- 
plete mobilization of productive resources, and their allocation to 
those areas that the government gives priority to . . . . " This was 
consistent with the view of inflation of those espousing structural- 
ism (see Glossary). 

The Popular Unity perspective on the way the economy func- 
tioned ignored many of the key principles of traditional economic 
theory. This was reflected in the greatly diminished attention given 
to monetary policies and also in the complete disregard of the ex- 
change rate as a key variable in determining macroeconomic equi- 
librium. In particular, the Popular Unity program and policies paid 
no attention to the role of the real exchange rate as a determinant 
of the country's international competitive position. Moreover, Popu- 
lar Unity failed to recognize that its policies would not be sustaina- 
ble in the medium term and that capacity constraints were 
going to become an insurmountable obstacle to rapid growth. 

Economic Crisis and the Military Coup 

After assuming power in November 1970, Popular Unity rapidly 



146 



The Economy 



began to implement its program. In the area of structural reforms, 
two basic measures were immediately begun. First, agrarian reform 
were greatly intensified, and a large number of farms were expropri- 
ated. Second, the government proposed to change the constitution 
in order to nationalize the large copper mines, which were jointly 
owned by large United States firms and the Chilean state. 

Government expenditures expanded greatly, and in 1971 real 
salaries and wages in the public sector increased 48 percent, on 
average. Salaries in the private sector grew at approximately the 
same rate. In the first two quarters of 1971, manufacturing out- 
put increased 6.2 percent and 10.6 percent, compared with the same 
periods in the previous year. Manufacturing sales grew at even 
faster rates: 12 percent during the first quarter and 1 1 percent dur- 
ing the second quarter. Overall, the behavior of the economy in 
1971 seemed to vindicate Popular Unity economists: real GDP grew 
at 7.7 percent, average real wages increased by 17 percent, ag- 
gregate consumption grew at a real rate of 13.2 percent, and the 
rate of unemployment dipped below 4 percent. Also, and more im- 
portant for Popular Unity political leaders, income distribution im- 
proved significantly. In 1971 labor's share of GDP reached 61.7 
percent, almost ten percentage points higher than in 1970. All of 
this created a sense of euphoria in the government. 

On June 11, 1971, Congress approved unanimously an amend- 
ment to the constitution nationalizing large copper mines. As a 
result, reform of the banking system and large manufacturing firms 
was more difficult because the government lacked the institution- 
al means to implement nationalization. Initially, this obstacle was 
alleviated because the government purchased blocks of shares, es- 
pecially bank shares, at high prices. These share acquisitions were 
complemented by a process of requisition or expropriation of 
foreign-owned companies based on an old, and until then forgot- 
ten, decree law promulgated during Marmaduke Grove Vallejo's 
short-lived Socialist Republic of 1932. 

All did not remain well in the economy in 1971. Popular Uni- 
ty's macroeconomic policies were rapidly generating a situation 
of repressed inflation. The high growth rate of GDP was largely 
the result of an almost 40 percent increase in imports of intermediate 
goods. The fiscal deficit had jumped from 2 percent of GDP in 
1970 to almost 11 percent in 1971. The rate at which the money 
supply grew exceeded 100 percent in 1971. As a result, the stock 
of international reserves inherited by the Allende government was 
reduced by more than one-half in that year alone. A rapid reduc- 
tion of inventories was another important factor in the expansion 
of consumption. 



147 



Chile: A Country Study 

By the end of 1971 , the mounting inflationary pressures had be- 
come evident. The economy was experiencing the consequences 
of an aggregate demand for goods and services well above the ag- 
gregate supply at current prices. This imbalance was aggravated 
by a series of labor disputes in many large establishments that result- 
ed in the takeover of those firms by their workers. In fact, this proce- 
dure became the institutionalized way in which the government 
seized a large number of firms. 

During 1972 the macroeconomic problems continued to mount. 
Inflation surpassed 200 percent, and the fiscal deficit surpassed 
13 percent of GDP. Domestic credit to the public sector grew at al- 
most 300 percent, and international reserves dipped below US$77 
million. 

The underground economy grew as more and more activities 
moved out of the official economy. As a result, more and more 
sources of tax revenues disappeared. A vicious cycle began: re- 
pressed inflation encouraged the informal economy, thus reduc- 
ing tax revenues and leading to higher deficits and even higher 
inflation. In 1972 two stabilization programs were implemented, 
both unsuccessfully. 

When evaluating the problems faced by the economy, Popular 
Unity economists generally held the view that the authorities had 
failed to impose appropriate controls in implementing Allende's 
program. This view guided the first, rather weak, attempt at stabiliz- 
ing the economy that was launched in February 1972. Price con- 
trols were the main ingredient of the program. By mid- 1972 it was 
apparent that the February stabilization program was a failure. 
The underground economy was now widespread, output had be- 
gun to fall, open inflation reached an annual rate of 70 percent 
in the second quarter, foreign-exchange reserves were very low, 
and the black-market value of the currency was falling rapidly. 
Parliamentary elections scheduled for March 1973 made the situ- 
ation particularly difficult for the government. In August 1972, 
a new stabilization program was launched under the political 
monitoring of the PCCh. This time not only prices were officially 
controlled, but the distribution channels were taken over by the 
government in an attempt to reduce the extent of the black market. 

Unlike the previous plan, the August 1972 stabilization program 
was based on a massive devaluation of the escudo (for value of the 
escudo — see Glossary). The government expected that the result 
would be an easing of the mounting pressures on the balance of 
payments. The program also called for two basic measures to con- 
tain fiscal pressures. First, nationalized firms were authorized to 
increase prices as a means of reducing the financing requirements 



148 



The Economy 



of the newly formed nationalized sector. Second, the program called 
for a massive increase in production, especially in the recently na- 
tionalized manufacturing and agriculture sectors (large manufac- 
turing firms and farms had been expropriated arbitrarily). The 
devaluation and a large number of price increases resulted in an- 
nualized inflation rates of 22.7 percent in August and 22.2 per- 
cent in September. 

In mid- August 1972, the government announced that it had draft- 
ed a new wage policy based on an increase in public- and private- 
sector wages by a proportion equal to the accumulated rate of 
inflation between January and September. In addition, the new 
policy called for more frequent wage adjustments. 

During the first quarter of 1973, Chile's economic problems be- 
came extremely serious. Inflation reached an annual rate of more 
than 120 percent, industrial output declined by almost 6 percent, 
and foreign-exchange reserves held by the Central Bank were barely 
above US$40 million. The black market by then covered a widen- 
ing range of transactions in foreign exchange. The fiscal deficit con- 
tinued to climb as a result of spiraling expenditures and of rapidly 
disappearing sources of taxation. For that year, the fiscal deficit 
ended up exceeding 23 percent of GDP. 

The depth of the economic crisis seriously affected the middle 
class, and relations between the government and the political oppo- 
sition became increasingly confrontational. On September 11, 1973, 
the regime came to a sudden and shocking end with a military coup 
and President Allende's suicide. 

When the military took over, the country was divided political- 
ly, and the economy was a shambles. Inflation was galloping, and 
relative price distortions, stemming mainly from massive price con- 
trols, were endemic. In addition, black-market activities were ram- 
pant, real wages had dropped drastically, the economic prospects 
of the middle class had darkened, the external sector was facing 
a serious crisis, production and investment were falling steeply, 
and government finances were completely out of hand. 

The Military Government's Free-Market Reforms, 1973-90 

After the military took over the government in September 1973, 
a period of dramatic economic changes began. Chile was trans- 
formed gradually from an economy isolated from the rest of the 
world, with strong government intervention, into a liberalized, 
world-integrated economy, where market forces were left free to 
guide most of the economy's decisions. This period was charac- 
terized by several important economic achievements: inflation was 
reduced greatly, the government deficit was virtually eliminated, 



149 



Chile: A Country Study 

the economy went through a dramatic liberalization of its foreign 
sector, and a strong market system was established. 

From an economic point of view, the era of General Augusto 
Pinochet Ugarte (1973-90) can be divided into two periods. The 
first, from 1973 to 1982, corresponds to the period when most of 
the reforms were implemented. The period ended with the inter- 
national debt crisis and the collapse of the Chilean economy. At 
that point, unemployment was extremely high, above 20 percent, 
and a large proportion of the banking sector had become bankrupt. 
During this period, a pragmatic economic policy that emphasized 
export expansion and growth was implemented. The second period, 
from 1982 to 1990, is characterized by economic recovery and the 
consolidation of the free-market reforms. 

Trade Policy 

One of the fundamental economic goals of the military regime 
was to open up the economy to the rest of the world. However, 
this was not the first attempt at liberalizing international trade in 
Chile. Between 1950 and 1970, the country went through three 
attempts at trade liberalization without ever reaching full liberali- 
zation. Moreover, all three attempts quickly ended in frustration 
and in a reversion to exchange controls, the use of multiple ex- 
change rates, and massive quantitative restrictions. A particularly 
interesting feature of the three attempts at liberalization is that, 
although they took place under three different exchange-rate sys- 
tems, they all collapsed, at least in part because of a highly over- 
valued real exchange rate. 

Starting in 1974, Chile adopted unilaterally an open trade re- 
gime characterized by low uniform import tariffs, a lack of exchange 
or trade controls, and minimum restrictions on capital movements. 
Starting in 1979, Chile's trade policy became highly liberalized; 
subsequently, there were no quantitative restrictions, licenses, or 
prohibitions. A uniform import tax varying between 10 percent 
and 35 percent took effect, and, until 1980, real exchange-rate over- 
valuation generally was avoided. By 1990 Chile was the only coun- 
try, according to the World Bank, whose index of liberalization 
reached the maximum possible level of 20, indicating an absence 
of external-sector distortions. 

In 1973 import tariffs averaged 105 percent and were highly dis- 
persed, with some goods subject to nominal tariffs of more than 
700 percent and others fully exempted from import duties. In ad- 
dition to tariffs, a battery of quantitative restrictions were applied, 
including outright import prohibitions and prior import deposits of 
up to 10,000 percent. These protective measures were complemented 



150 



The Economy 



by a highly distorting multiple exchange-rate system consisting of 
fifteen different nominal exchange rates. By August 1975, all quan- 
titative restrictions had been eliminated, and the average tariff had 
been reduced to 44 percent. This process of tariff reductions con- 
tinued until June 1979, when all tariffs but one (that on automo- 
biles) were set at 10 percent. In the mid-1980s, in the midst of the 
debt crisis, temporary tariff hikes were implemented; by 1989, 
however, a uniform level of 15 percent had been established. 

During the early period (1975-79) of the military regime, the 
opening of Chile's external sector was accompanied by a strongly 
depreciated real exchange rate. In 1979, however, the authorities 
adopted a fixed-exchange-rate policy that resulted in an acute over- 
valuation of the Chilean peso (for value of the Chilean peso — see 
Glossary), a loss in international competititiveness, and, in 1982, 
a deep crisis. In 1984-85 this situation was reversed, and a policy 
of a depreciated and highly competitive real exchange rate was im- 
plemented. The combination of these two policies — low tariffs and 
a competitive real exchange rate — had a significant impact on 
Chile's economic structure. The share of manufacturing in GNP 
dropped from almost 29 percent in 1974 to 22 percent in 1981. 
Productivity in tradable sectors grew substantially, and exports be- 
came highly diversified. Chile had also diversified its export mar- 
kets, with the result that no individual market bought more than 
20 percent of the country's total exports. By the early 1990s, exports 
had become the engine of growth, and the Chilean trade reform was 
winning praise from multinational institutions and observers of dif- 
ferent ideological persuasions. Largely thanks to the boom in ex- 
ports between 1986 and 1991, particularly the increasing growth 
in exports of fresh fruits and manufactured products, Chile ex- 
perienced the highest rate of GDP growth in Latin America (the 
''Chilean miracle"), with an annual increase of 4.2 percent. 

In what was perhaps the surest sign of the success of trade re- 
form, the new democratic government of President Patricio Ayl- 
win Azocar (1990-94), elected in December 1989, decided to 
continue the opening process and reduced import tariffs to a uni- 
form 11 percent. Interestingly, Aylwin's economic team, includ- 
ing the minister of finance and the minister of economy, 
development, and reconstruction, had been relentless critics of the 
trade reform process during its implementation in the mid- and 
late 1970s. 

Banking Reform and the Financial Sector 

A major policy objective of the military regime was the liberali- 
zation and modernization of the banking sector. Until 1973 the 



151 



Chile: A Country Study 

domestic capital market had been highly repressed, with most banks 
being government owned. Real interest rates were negative, and 
there were quantitative restrictions on credit. The liberalization 
process began slowly, in early 1974, with the sale of banks back 
to the private sector, the freeing of interest rates, the relaxation 
of some restrictions on the banking sector, and the creation of new 
financial institutions. International capital movements, however, 
were strictly controlled until mid- 1979. In June 1979, the govern- 
ment decided to begin to liberalize the capital account (see Glos- 
sary) of the balance of payments, lifting some restrictions on 
medium- and long-term capital movements. 

The opening of the capital account resulted in a massive inflow 
of foreign capital that contributed to Chile's subsequent interna- 
tional debt problems. In 1980 capital inflows were more than double 
those of 1979— US$2.5 billion versus US$1.2 billion— and in 1981 
the level of capital inflows nearly doubled again, to US$4.5 billion. 

An important result of the reforms of the financial sector was 
that the number of financial institutions and the volume of finan- 
cial intervention both increased greatly. For example, in 1981 there 
were twenty-six national banks, nineteen foreign banks, and fifteen 
savings and loan institutions (financieras) , a number significantly 
higher than the eighteen national banks and one foreign bank in 
operation in September 1973. Furthermore, between 1973 and 1981 
the real volume of total credit to the private sector increased by 
more than 1,100 percent. 

At least in terms of increasing the degree of financial intermedi- 
ation, liberalization was a success. However, it was apparent from 
the beginning that capital-market liberalization faced three major 
obstacles. First, interest rates were very high. Second, in spite of 
the significant growth in the extent of financial intermediation, 
domestic savings had not increased to the extent that the propo- 
nents of the reforms had expected. In fact, domestic savings were 
at one of their lowest levels in history from 1974 to 1982. There 
are several possible explanations for the behavior of domestic sav- 
ings. One of the most popular of these relies on the notion that 
the appreciation of domestic assets that was taking place at the time, 
such as stocks and land prices, resulted in a real accumulation of 
assets without saving. This increase in private-sector wealth was 
consistent with higher levels of consumption at a given income. 
Third, and perhaps more important, the rapid growth of the finan- 
cial sector took place in an environment in which monetary authori- 
ties exercised no supervision. As a result, many banks accumulated 
an unprecedented volume of bad loans, a situation that led to the 
financial crisis of 1982-83. As a consequence of this crisis, a number 



152 



The Economy 



of banks went bankrupt during 1983-84, were placed temporarily 
under government control, and then were reprivatized. By 1992, 
after monetary authorities had learned the hard way the impor- 
tance of bank supervision, Chile's financial sector had become high- 
ly stable and dynamic. 

Rural Land Market Reform 

At the time of the military coup, about 60 percent of Chile's ir- 
rigated land and 50 percent of total agricultural land was under 
the control of the public sector. Land reform had started in the 1960s 
with expropriations of large landholdings (those larger than eighty 
basic irrigated hectares — BIH) and the encouragement of small 
farms (about 8.5 BIH) managed by their owners. The Allende ad- 
ministration favored large-scale farms under cooperatives and state- 
farm management over private ownership of agricultural land. 
Starting in 1974, the military government began using Cora to end 
agrarian reform by distributing land to establish family farms with 
individual ownership. In a period of three years, 109,000 farmers 
and 67,000 descendants of the Mapuche had been assigned property 
rights to small farms. About 28 percent of the expropriated land 
was returned to previous owners, and the rest was auctioned off. 

Three key legal issues were then clarified by decree law in 1978. 
Government authority to expropriate land was repealed, the ceil- 
ings on landholdings (the equivalent of eighty BIH) were removed, 
and the ban on corporate ownership of land was eliminated. At 
the end of 1978, all farmland owned publicly had been distribut- 
ed, and Cora was legally closed. 

Reforms in the legislation that regulated land rentals and land 
subdivisions in 1980 added flexibility to the rural land markets. 
But perhaps more crucial aspects of the reforms were the separa- 
tion of water rights from the land itself and the legal possibility 
of transferring water titles independently of land transactions. 

Labor-Market Reform 

Immediately after the 1973 coup, many labor institutions, that 
is, traditional channels of influence, such as government offices, 
which unions used to get their voices heard, were disbanded, and 
some important unions were dissolved. Thus, wage adjustments 
became mainly a function of indexation, which, given Chile's his- 
tory of inflation, had become an established element of any wage 
negotiation. Indexation was kept in place until 1982, through ten 
years of declining inflation. 

Starting in October 1973, the government mandated across-the- 
board periodic wage adjustments tied to the rate of inflation. Lower 



153 



Chile: A Country Study 

wages were adjusted proportionally more than higher ones. From 
1973 to 1979, indexation to past inflation with varying lags was 
the norm throughout the economy. The 1979 Labor Plan formal- 
ized this practice by requiring that collective bargaining agreements 
allow for wage adjustments at or above the rate of inflation. In 1982 
the indexation clause of the Labor Plan was eliminated. The govern- 
ment continued the practice of periodically announcing wage re- 
adjustments and bonuses, with the wage increases usually not 
keeping pace with inflation and covering the nonunionized sector 
only. The dynamism of the economy in the early 1990s resulted 
in actual wage increases above officially announced readjustments. 

The Employment Security Law established that in the absence 
of "just cause" for dismissal, such as drunkenness, absenteeism, 
or theft, a dismissed employee could be reinstated to the job by 
a labor court. This law was replaced by a less costiy system of sever- 
ance payments in 1978. Decree Law 2,200 authorized employers 
to modify individual labor contracts and to dismiss workers without 
"cause." A minimum severance payment was established that was 
equivalent to one month of salary per year of service, up to a max- 
imum of five months' pay. This new system applied to all con- 
tracts signed after August 1981. 

The changes introduced by Decree Law 2,200, along with the 
1979 reforms, which established new mechanisms to govern 
union activity (Decree Law 2,756) and collective bargaining (Decree 
Law 2,758), became known in Chile as the Labor Plan. Decree 
Law 2,756 departed significantly from traditional legislation: 
union affiliation within a company became voluntary, and all 
negotiations would now have to be conducted at the company lev- 
el; bargaining among many companies would be eliminated. Ac- 
cording to the previous law, which had applied until the 1973 coup, 
once the majority of the workers of an enterprise chose to join an 
"industrial union," all workers became part of that union. That 
is, one union would have exclusive representation of all workers 
in an enterprise. The right to collective bargaining was granted 
to unions at the enterprise level and also to union federations and 
confederations. This resulted in some negotiations at the industry 
level with the participation of the Ministry of Labor and Social 
Welfare through the Labor Inspectorate. As in the past, the new 
law required participation of 10 percent of the workers or a mini- 
mum of twenty-five workers (whichever was greater) for creation 
of a union. Workers were not required to be represented by a un- 
ion in collective bargaining. 

Decree Law 2,758 stipulated that in the event of a strike, a firm 
could impose a lockout and temporarily lay off workers, which the 



154 



Farmers at work in the 
Maule Norte irrigation 

project near Talca 
Courtesy Inter-American 

Development Bank 




previous law had prohibited. At the same time, Decree Law 2,758 
established norms about collective bargaining, and in its Article 
26 the law established that unionized workers' nominal wages should 
be adjusted to at least match the rate of inflation. This article, which 
became a severe constraint to downward real wage flexibility dur- 
ing the 1982-83 crisis, can be understood only in the context of 
a previously existing policy of 100 percent indexation across the 
board. In 1982, at the onset of the debt crisis, Article 26 was amend- 
ed, eliminating the downward inflexibility of real wages. This 
reformed law was in effect until April 1991 , when some important 
changes proposed by the Aylwin administration were approved by 
the National Congress (hereafter, Congress). 

Public Employment Programs 

Two public employment programs affected the labor market 
during the period of economic reforms between 1975 and 1987. 
The Minimum Employment Program (Programa de Empleo 
Mmimo — PEM) was created in 1975 at a time when unemploy- 
ment had reached record levels. The program, administered by 
local governments, paid a small salary to unemployed workers, who, 
for a few hours a week, performed menial public works. At first, 
the government tightly restricted entry into the program. Gradually, 
most of these restrictions were lifted, and a larger number of un- 
employed people were allowed to participate. Thus, the proportion 



155 



Chile: A Country Study 



of the labor force employed by the program remained virtually con- 
stant between 1977 and 1981, despite the economic recovery and 
a reduction in the real value of PEM compensation. 

When Chile entered a new and more severe recession, the num- 
ber of individuals employed by PEM in the Metropolitan Region 
of Santiago increased from about 23,000 in May 1982 to 93,000 
in May 1983. An Employment Program for Heads of Household 
(Programa de Ocupacion para Jefes de Hogar — POJH), created 
in October 1982, employed about 100,000 individuals in the greater 
Santiago area by May 1983. The two programs combined absorbed 
more than 10 percent of the labor force of the greater Santiago area 
in May 1983. These programs were also implemented in other 
regions of the country. The PEM program was cut back drastically 
in February 1984. Likewise, by December 1988, there were only 
about 5,000 individuals employed by the POJH in the entire 
country. 

The Debt Crisis: Further Reforms and Recovery 

The international debt crisis unleashed in 1982 hit the Chilean 
economy with particular severity, as foreign loans dried up and 
the international terms of trade (see Glossary) turned drastically 
against Chile. The policies implemented initially to face the 1982 
crisis can best be described as hesitant. In early 1983, the finan- 
cial sector was nationalized as a way to avoid a major banking cri- 
sis, and a number of subsidy schemes favoring debtors were enacted. 
The decision to subsidize debtors who had borrowed in foreign cur- 
rency during the period of fixed exchange rates and to bail out the 
troubled banks resulted in heavy Central Bank losses, which con- 
tributed to the creation of a huge deficit in public-sector finance. 
This deficit, in turn, would become one of the underlying causes 
of the inflation of the early 1990s. Different exchange-rate systems 
were tried, including a floating rate, only to be abandoned rapidly 
and replaced by new plans. Policies aimed at restructuring the 
manufacturing sector, which had entered a deep crisis as a conse- 
quence of the collapse of some of the major conglomerates, the so- 
called groups (grupos), were implemented. In spite of this array of 
measures, the economy did not show a significant response; un- 
employment remained extraordinarily high, and the external cri- 
sis, which some had expected to represent only a temporary setback, 
dragged on. 

In early 1985, increasingly disappointed by the economy's per- 
formance, Pinochet turned toward a group of pragmatic economists 
who favored free markets and macroeconomic stability. Led by 
newly appointed finance minister Hernan Buchi Buc, an economist 



156 



The Economy 



who had studied business administration at Columbia University, 
the new economic team devised a major adjustment program aimed 
at reestablishing growth, reducing the burden of the foreign debt, 
and rebuilding the strength of the financial and manufacturing sec- 
tors. Three policy areas became critical in the implementation of 
the program: active macroeconomic policies, consolidation of the 
market-oriented structural reforms initiated in the 1970s, and debt- 
management policies geared toward rescheduling debt payments 
and making an aggressive use of the secondary market. With the 
help of the International Monetary Fund (IMF — see Glossary), the 
World Bank, and improved terms of trade, these policies succeed- 
ed in achieving their objectives. 

The macroeconomic program of a group of Chilean economists 
known as the "Chicago boys" (see Glossary), who had guided 
Pinochet's early economic policies, had relied on a hands-off "au- 
tomatic adjustment" strategy. By mid- 1982 this approach had 
generated a severe overvaluation of the real exchange rate. By 
contrast, the new macroeconomic program relied on active and 
carefully monitored macroeconomic management. An active 
exchange-rate policy, based on large initial exchange-rate adjust- 
ments followed by periodic small devaluations, became one of the 
most important policies of the post- 1982 period. Between 1982 and 
1988, the international competitiveness of Chilean exports was in- 
creased greatly by a real exchange-rate depreciation of approxi- 
mately 90 percent. This policy not only helped generate a boom 
in nontraditional exports but also contributed to reasonable interest- 
rate levels and to the prevention of capital flight. 

The adjustment program that started in 1985 also had a struc- 
tural adjustment component that was aimed at consolidating the 
market-oriented reforms of the 1970s and early 1980s, including 
the privatization process, the opening of the economy, and the de- 
velopment of a dynamic capital market. There were several struc- 
tural goals of the 1985 program: rebuild the financial sector, which 
had been nearly destroyed during the 1982 crisis; reduce import 
tariffs below the 35 percent level that they had reached during 1984 
to a 15 percent uniform level; and promote exports through a set 
of fiscal incentives and a competitive real exchange rate. 

Perhaps the most important aspects of these structural reform 
measures were the privatization and recapitalization of firms and 
banks that had failed during the 1982-83 crisis. As a first step in 
this process, the Central Bank bought private banks' nonperforming 
portfolios. In order to finance this operation, the Central Bank 
issued domestic credit. The banks, in turn, paid a rate of 5 per- 
cent on the nonperforming portfolios and promised to repurchase 



157 



Chile: A Country Study 

them out of retained profits. This recapitalization program had as 
its counterpart a privatization plan that returned the ownership 
of those banks and firms that had been nationalized in 1983 to the 
private sector. Economist Rolf J. Liiders estimates that about 550 
enterprises under public-sector control, including most of Chile's 
largest corporations, were privatized between 1974 and 1990. By 
the end of 1991 , fewer that fifty firms remained in the public sec- 
tor. The overall privatization program undertaken after 1985 has 
been criticized by some Chileans and also by some international 
economists because banks and manufacturing firms were sold too 
rapidly and at "very low prices." 

Chile's structural adjustment of the second half of the 1980s was 
unique in comparison with the rest of the world. The most difficult, 
controversial, and costly reforms — including the bulk of privati- 
zation, trade liberalization, financial deregulation, and labor market 
streamlining — were undertaken in Chile in the 1975-80 period; 
the measures taken after 1985 were minor in comparison. The suc- 
cess of the post- 1985 period was rooted in the early reforms. For 
example, the boom in nontraditional exports that took place in the 
second half of the 1980s was only possible because of investments 
begun almost ten years before. The markets' flexible and rapid 
response to incentives was also a direct consequence of the microeco- 
nomic reforms of the 1970s. 

One of the most hotly debated issues of the Chilean recovery 
of the second half of the 1980s concerns the different foreign-debt 
conversion plans aimed at rapidly reducing foreign indebtedness. 
When the debt crisis erupted in 1982, Chile's foreign debt was 
US$17.2 billion, one of the highest debts per capita in the world. 
Through the aggressive use of a variety of debt-conversion plans, 
between 1985 and 1991 Chile retired an estimated US$10.5 bil- 
lion of its debt, most of which was converted into equity in Chilean 
companies. 

Chile's net international reserves totaled US$9 billion in 1992, 
enough to cover a year of imports and equivalent to roughly half 
of its foreign debt. The stock of foreign direct investment in Chile 
was estimated to be between US$10 billion and US$13 billion, 
roughly 30 percent of GDP. About US$4 billion of this was ac- 
quired through debt-equity conversions. The debt-swap program 
was ended when the growth of direct investment and the strength 
of the economy had done away with the need for special incen- 
tives to attract foreign capital. 

The Return to Democracy, 1990 

On March 11, 1990, General Pinochet handed the presidency 



158 



A view of the Trans-Andean Highway, the most important road 

link between Argentina and Chile 
Courtesy Inter-American Development Bank 

of Chile to Patricio Aylwin. When Aylwin's Coalition of Parties 
for Democracy (Concertacion de Partidos por la Democracia — 
CPD) government took over, Chile had the best performing econ- 
omy in Latin America. 

Continuity in Economic Policy 

For years, opponents of the Pinochet government had argued 
that its economic program was based on ideas alien to the Chilean 
tradition. In early 1990, analysts, scholars, stockbrokers, and poli- 
ticians throughout the world wondered if the new democratic 
government of President Aylwin would maintain some, or for that 
matter any, of the most important aspects of the military govern- 
ment's market-oriented policies, or if the CPD government would 
reform the system along the lines of the decade-long criticisms of 
the opposition. What made this question particularly interesting 
was that at the time of the restoration of democracy, Chile was 
considered by many, including international institutions such as 
the World Bank and the IMF, as a premier example of the way 
the adjustment process after the debt crisis should be carried out. 
A number of analysts asked themselves how the advent of democra- 
cy would affect Chile's economic policy. In particular, analysts were 



159 



Chile: A Country Study 



concerned about the new government's attitude toward the free 
price system and Chile's new openness to international competition. 

Regarding price competition, the Aylwin program's position was 
stated as follows: "We affirm that within an efficient economic poli- 
cy there is no role for price controls. ' ' In discussing the role of the 
market, the program noted: "The market cannot be replaced as 
a mechanism for consumers to articulate their preferences." These 
views were a far cry from those sustained by Frei's Christian 
Democratic government of the 1960s and, especially, from those 
of Allende's Popular Unity government of 1970-73. They were 
also substantially different from those of the new market critics of 
the 1970s and mid-1980s. Indeed, the CPD program conveyed that 
there had been a significant convergence of domestic views on the 
role of markets in the economic process. 

Addressing the opening of the economy to the rest of the world, 
the CPD program stated: ' 'The most important instruments of the 
external sector policy are the maintenance of a stable high real ex- 
change rate and a reasonably low import tariff [emphasis added]. 
This statement suggests that from its onset the Aylwin government 
was not prepared to implement major changes to one of the most 
fundamental features of Chile's new economics. 

Emphasis on Social Programs 

In seeking funding for new social programs, the Aylwin govern- 
ment made clear immediately that the only way of increasing so- 
cial spending without generating unsustainable macroeconomic 
pressures was by finding secure sources of government revenue. 
Economists associated with Aylwin' s CPD coalition calculated in 
1989 that in order to implement their antipoverty social programs, 
annual funds on the order of 4 percent of GDP would be required. 
They argued that these resources could be obtained through a com- 
bination of expenditures, reallocation, foreign aid, and increased 
tax revenues. In order to implement these programs rapidly, in 
April 1990 President Aylwin submitted to the newly elected Con- 
gress a legislative proposal aimed at reforming the tax system. The 
main features of the package were the following: the corporate 
income-tax rate was to be increased temporarily from 10 percent 
to 15 percent for 1991-93; and the tax base, which in 1985 had 
been defined as distributed profits, was to be broadened to include 
total profits. The progressiveness of the personal income tax was 
to be increased by reducing the income level at which the maxi- 
mum rate was applicable; and the rate of the value-added tax 
(VAT — see Glossary) would be increased to 18 percent from 16 
percent. During most of the Pinochet government, the VAT rate 



160 



The Economy 



had been 20 percent. It was only reduced to 16 percent prior to 
the electoral contest before the plebiscite on Pinochet's continua- 
tion in power. After intense and often frustrating negotiations be- 
tween the Aylwin administration and the opposition, the tax reform 
was approved in late 1990. 

Pinochet's labor reforms of 1978-79 had been, from the begin- 
ning, strongly criticized by the opponents of the military regime. 
Although the 1979 decrees had modernized labor relations in some 
areas, they had also severely limited the activities of unions and, 
as initially conceived, had made real wage rates unusually rigid. 
Reforming the labor plan was an important priority of the new 
democratic government. 

After the support of some opposition senators was obtained, a 
mild labor reform was passed in 1991. An important characteris- 
tic of Chile's constitution of 1980 is that it stipulates the seating 
of nine nonelected senators in the legislature's upper house, as well 
as former presidents and former justices of the Supreme Court. 
The CPD coalition lacked a parliamentary majority because the 
nonelected senators had been appointed by Pinochet. Consequendy, 
in order to approve legislation it had to obtain support from the 
opposition for some measures. 

The new labor legislation restricted the causes for firing em- 
ployees, increased the compensation that firms had to pay to lay 
off employees, and restricted employers' recourse to lockouts. 
Although there was little doubt that these new regulations had in- 
creased the cost of labor, it was too early to know the effect of the 
new legislation on job creation. It was known, however, that the 
reform of labor laws by a democratically elected government had 
greatly legitimated the modernization of labor relations. In a way, 
the concept of labor-market flexibility had ceased to be associated 
exclusively with the authoritarian military regime and had become 
generally accepted by the population at large. 

The Current Structure of the Economy 

A World Bank study shows that after the trade liberalization of 
the 1970s, Chile experienced a substantial increase in productivity. 
This study also shows that in the 1987-91 period, Chile's pro- 
ductivity increased much more than that of any other country in 
Latin America. Chile's national accounts for 1989-91 show a num- 
ber of interesting features (see table 20, Appendix). First, the share 
of agriculture, livestock, and forestry in GDP decreased during these 
three years from 8.1 percent to 7.9 percent. This short-term trend, 
however, was somewhat misleading. In 1971 the share of GDP gen- 
erated by agriculture, livestock, and forestry had been 7.4 percent. 



161 



Chile: A Country Study 



From a historical perspective, the increase in the relative impor- 
tance of the primary sector in a twenty-year span — from 7.4 per- 
cent to 7.9 percent of GDP — was somewhat of an anomaly. A 
well-documented trend is that in the vast majority of countries, 
as income and output expand and national economies become more 
developed, this sector generates a smaller share of GDP. In the 
case of Chile, the absence of this phenomenon can be explained 
by the drastic structural reforms implemented in the second half 
of the 1970s and in the 1980s. An important consequence of the 
market-oriented reforms of the Pinochet government was the elimi- 
nation of discrimination against export agriculture that had 
characterized the Chilean economy during the decades of import- 
substitution industrialization. The level of productivity of the agri- 
cultural sector (measured as crop yields) had increased significantly 
by the early 1990s (see Agriculture, this ch.). 

A second important feature of Chile's national accounts in 
1 989-9 1 is that the manufacturing sector represented approximately 
21 percent of GDP for the period. This was significantly lower than 
this sector's share of total output in 1969-70, when it was almost 
25 percent. The reduced participation of manufacturing also reflect- 
ed the structural reforms of the 1970s and 1980s. Those policies 
had eliminated the protection walls that had artificially encouraged 
Chile's industrial sector during the 1960s. 

The share of mining in GDP remained roughly constant from 
1967 to 1992. However, the composition of mining production 
changed substantially; in particular, there was a drop in the im- 
portance of copper mining. Also, construction's share of GDP 
shrank from 7.7 percent of GDP in 1970 to 6.0 percent in 1992. 
During the same period, the share of services increased from 26 
percent to 29.1 percent. Within this sector, a particularly signifi- 
cant increase occurred in the financial area (see fig. 8). 

Industry and Manufacturing 

The Chilean manufacturing sector experienced strong perfor- 
mance in the 1985-91 period, and the Industrial Development As- 
sociation (Sociedad de Fomento Fabril — Sofofa) expected a 7 
percent to 10 percent increase in industrial output in 1992. (The 
sector actually grew 12.3 percent during the first three quarters.) 
Between 1985 and 1991, the manufacturing sector grew at an aver- 
age annual rate of 6.2 percent, a figure that compared favorably 
with the average rate for the 1960s of 5.1 percent per annum. 
However, in spite of the dynamic behavior of manufacturing as a 
whole, the development of different industries within the sector was 
uneven. Some industries were able to exploit Chile's comparative 



162 



The Economy 



advantages, expanding at a rapid pace. In many cases, this ex- 
pansion was the result of the development of new international mar- 
kets and of rapidly growing exports. Other industries, however, 
were victims of drops in relative prices, caused either by trade liber- 
alization or by loss of international buyers, and were forced to 
reduce their scope of operations. 

The major industries of the Chilean economy in the late 1980s 
and early 1990s were agriculture and food products, textiles and 
clothing, nonelectrical machinery, transportation equipment, and 
industrial chemicals. As noted previously, the performance of in- 
dividual industries was uneven (see table 21, Appendix). Although 
foodstuffs, furniture, and glass products experienced strong expan- 
sion, other industries had a lower level of output in 1991 than in 
1979. 

For decades, wine has been one of Chile's best-known products, 
and wineries were expected to experience double-digit growth in 
the 1990s. Exports of wine increased during the 1970s, primarily 
to the United States, reaching US$31 .9 million in 1989. Total wine 
exports in 1992 were estimated at US$127 million. By that year, 
Chile had become the third largest exporter of wine to the United 
States, behind Italy and France. 

Not surprisingly, those sectors that had shrunk since the early 
1980s, such as footwear and transportation equipment, were those 
that had been hardest hit by increased foreign competition. 
However, the firms that finally survived in these sectors did so by 
adapting to the new external circumstances and by finding ways 
to rapidly increase productivity. In 1992 the transportation equip- 
ment sector was the most dynamic of all, increasing output at an 
annual rate of 46 percent. 

Mining 

Although copper's relative importance declined in the 1970s and 
1980s, it was still the Chilean economy's most important product 
in 1992. The mining sector represented 6.7 percent of GDP in 1992, 
as compared with 8.9 percent in 1985. In 1991 copper exports 
represented 30 percent of the total value of exports, a substantial 
decline with respect to the 1960s, when it represented almost 80 
percent of total exports. Mining exports in general accounted for 
about 48 percent of total exports in 1991. 

Since the late 1970s, the production of gold and silver has in- 
creased greatly (see table 22, Appendix). The lead, iron, and 
petroleum industries have shrunk since the mid-1970s, the result 
of both adverse international market conditions and declines in the 
availability of some of these resources. With a combined total value 



163 



Chile: A Country Study 



FY 1992 - GDP US$33.7 billion 



Services 
(including financial services) 
29.1% / 



Agriculture and forestry 7.4% 



Transportation and 
communications 
7.6% 




Fishing 0.8% 
*w//\ Mining 6.7% 



sX Electricity, gas, and water 

^ 2.5% 
Construction 

6.0% 



Manufacturing 



20.8% 



Trade 
19.1% 



Source: Based on information from Economist Intelligence Unit, Country Report: Chile [Lon- 
don], No. 2, 1993, 11. 

Figure 8. Gross Domestic Product (GDP) by Sector, 1992 

of about US$4 billion, two of the largest investments planned in 
Chile in the early 1990s were designated for aluminum- smelter 
projects in the Puerto Aisen and Strait of Magellan areas. 

Two developments in the copper sector were noteworthy. First, 
in the 1987-91 period there was a substantial increase in the out- 
put of refined copper, as well as a relative decline in the production 
of blister copper (see table 23, Appendix). Second, the state-owned 
Copper Corporation (Corporation del Cobre — Codelco), the world's 
largest copper producer, still had an overwhelmingly dominant role 
(accounting for 60 percent of Chile's copper output in 1991). The 
so-called Codelco Law of April 1992 authorized Codelco for the 
first time to form joint ventures with the private sector to work 
unexploited deposits. Thus, in a major step for Codelco, in 1992 
it invited domestic and foreign mining firms to participate in four 
joint explorations in northern Chile. Foreign-owned private firms 
were to become increasingly important as new investment projects 
got under way. The heightened importance of these foreign pri- 
vate firms in large-scale copper mining also resulted from the in- 
ternational business community's improved perception of Chile and 
from a mining law enacted during the Pinochet regime that clear- 
ly established compensation rules in the case of nationalization and 



164 



The Economy 



otherwise encouraged investment in this sector. Given this more 
favorable context, Phelps Dodge, a United States mining compa- 
ny, and the Sumitomo Metal Mining Company, a Japanese firm, 
signed a US$1 .5 billion contract in 1992 with the Chilean govern- 
ment to develop La Candelaria, a copper and gold mine south of 
Copiapo. The mine's potential production of refined copper was 
equivalent to about 10 percent of Codelco's entire production. 

Despite the decline in copper's importance, Chile continued to 
be affected by the vagaries of the international copper market. The 
high variability of copper prices affects the Chilean economy, par- 
ticularly the external accounts and the availability of foreign ex- 
change, in several ways. In the 1987-91 period, the international 
copper market was very favorable; for example, copper prices in 
1989 were 50 percent higher than in 1980. By May 1992, however, 
the price of copper had declined to about its 1980 level. The govern- 
ment decided to counteract the effect of the variability of copper 
prices by creating the Copper Stabilization Fund, which works as 
follows: whenever the price of copper increases, the government 
directs a proportion of the increased revenues into the fund; these 
resources will then be used during those years when the price of 
copper falls below its "normal" level. This institutional develop- 
ment has helped Chile at least partially free itself from the volatili- 
ty of the copper market. 

Agriculture 

As a result of land appropriations from 1970 to 1973, extensive 
disinvestment occurred in the agricultural sector. The Pinochet 
government reversed this trend by returning lands to previous own- 
ers and providing incentives for increased exports. Although Chile 
was basically a net importer of agricultural goods from 1960 to 1970, 
by 1991 agricultural exports, as well as forestry and fishing exports, 
were becoming increasingly important in the economy. Whereas 
in 1970 Chile exported US$33 million in agriculture, forestry, and 
fishing products, by 1991 the figure had jumped to US$1.2 bil- 
lion. This figure excluded those manufactured goods based on the 
products of the agriculture, livestock, and forestry sectors. 

In the 1989-91 period, exports of fresh fruits became increas- 
ingly important (see table 24, Appendix). Data also indicate that 
production of grapes, pears, lemons, and peaches was expanding 
rapidly (see table 25, Appendix). However, the country's virtual 
monopoly on grape exports during the Northern Hemisphere's 
winter season is likely to disappear as other potential giants, such 
as Argentina, begin to compete. The fruit-packing industry also 
expanded greatly, providing seasonal employment to thousands of 



165 



Chile: A Country Study 



workers in its refrigerated plants. Although fruit production takes 
place in small to medium-size landholdings, fruit-packing plants 
are very large operations. Indeed, six of the major fruit-packing 
plants generate more than half of all the boxes exported. 

Chile's success in export agriculture is not confined to fruits. 
Also increasing significantly is production of more traditional crops, 
many of which are devoted primarily to domestic consumption. 
Much of the increased agricultural production in the country is 
the result of rapidly improving yields and higher productivity (see 
table 26, Appendix). These figures are particularly impressive if 
compared with historical data. For example, in the 1969-70 agricul- 
tural year, wheat's yield is 12.5 quintals per hectare, that of corn 
was 32.4 tons per hectare, and that of potatoes was 95.4 tons per 
hectare. By 1990-91 these yields had increased to 34.1 quintals 
of wheat per hectare, 83.9 quintals of corn per hectare, and 142.2 
quintals of potatoes per hectare. 

Fishing and Forestry 

Chile is well endowed in fish and forest resources. Since the 1980s, 
output has increased rapidly in both sectors, and exports have 
boomed. An increasing proportion of these sectors' output is being 
processed, appearing in the economic statistics as manufactured 
products. 

Fishing 

The cold waters of South America's western coast are rich in 
fish and contain a wide variety of shellfish. For instance, about 
800 varieties of mollusks are found there, including the largest aba- 
lones and edible sea urchins in the world. Some species, such as 
the abalones, have been depleted to the point that they cannot be 
harvested legally. About 750 kilometers from the mainland, the 
waters surrounding the Islas Juan Fernandez are much warmer 
and contain different types of fish and shellfish, including lobster. 

Fishing expanded rapidly starting in the late 1970s. By 1983 Chile 
was ranked fifth in the world in catch tonnage and has become the 
world's leading exporter of fish meal. Despite naturally caused year- 
to-year variations, the volume of the total fish catch has increased 
over the long term. For example, in 1970 the total catch was 1.2 
million tons, but the figures increased to 2.9 million tons in 1980 
and 6.3 million tons in 1989. The total catch was about 5.4 mil- 
lion tons in 1990, according to Central Bank data. Total fish caught 
in 1991 reached 6 million tons, and fishing exports totaled US$1 . 1 
billion, up 21 percent from 1990 and 138 percent from 1985 
(see table 28, Appendix). Of the 1991 figure, fish meal accounted 



166 



A worker pauses while 
unloading grapes at a 
packing shed in Mayoco, 
a farming community 
near Santiago. 
Courtesy Inter -American 
Development Bank 




for US$466 million. Fish exports rose to 6.5 million tons in 1992. 

Salmon production was expected to reach 46,000 tons in 1992, 
earning about US$250 million and turning the country into the 
third largest producer in the world (after Norway and Canada). 
Starting with fifty- three tons in 1981 , the explosive growth in salmon 
production and exports reflected the combination of perfect natural 
conditions for its cultivation in the south with the successful adap- 
tation of modern technology. 

By the early 1990s, a lack of fishing regulations was threatening 
some species and giving the large fishing fleets advantages over 
the smaller- scale, traditional fishermen who use small boats. After 
long debate, Congress approved the new General Fishing Law in 
July 1991 . The law's purpose was to encourage investment in com- 
mercial fishing by ensuring the conservation of hydrobiological 
resources, by protecting against overfishing, by reserving for tradi- 
tional fishermen an exclusive eight-kilometer strip of coastal waters, 
and by promoting fishing research. The infrastructure plan also 
included providing resources for developing large and small ports 
for industrial and traditional fishing. Total output of industrial- 
ized fish products was expected to increase significantly with new 
investments during the 1990s. Both the good catches in the 1989-91 
period and the openness of the regulations had prompted Chilean 
companies to invest a total of US$100 million and to build nearly 
twenty boats. 



167 



Chile: A Country Study 
Forestry 

Beginning in 1975, the planting and exploitation of forests was 
subsidized heavily by the state, which remitted 70 percent of the 
cost of planting new areas with trees, exempted such lands from 
taxes, and permitted a 50 percent deduction for tax purposes from 
the profits generated from cutting the forests. The forestry policy 
of the military government was a major exception to its free-market 
approach and stimulated a significant expansion of forested land. 

Chile's forested land is highly concentrated in the hands of a 
few major companies, principally those connected with the flourish- 
ing paper industry and with the national oil company. About 90 
percent of all the wood harvested comes from plantations that were 
established, beginning in the early 1960s, on land of poor quality 
that originally had been cleared of forests for the growing of wheat 
and other crops. Reforestation, mostly with pine but also increas- 
ingly with eucalyptus, has continued at a faster pace than the cut- 
ting of the forests, thereby ensuring ample supplies for the 
foreseeable future (see table 28, Appendix). It is thought that the 
volume of production could double 1990 levels by the year 2000. 

The public sector is playing a drastically smaller role in forest- 
try. This diminution of the public sector's role is the result of the 
general tendency in the country toward reducing, and even 
eliminating, directly productive government activities. In 1992 the 
forestry industry was objecting strongly to the new powers that the 
Aylwin government was proposing to confer on the National For- 
estry Corporation (Corporacion Nacional Forestal — Conaf) to pro- 
tect native forests. 

Whereas exports of basic — that is, nonmanufactured — forestry 
products had declined by the early 1990s, exports of manufactured 
wood products had almost doubled. This doubling of manufactured 
wood exports meant that instead of exporting raw logs, Chile is 
increasingly adding value to its forest products and is producing 
such items as milled boards, pulp, paper, and cardboard (see ta- 
ble 24, Appendix). The main market is Japan, which absorbed 25 
percent of the value of exports in 1 993 , followed by the United States 
and Germany, with 8 percent each. Chile's print industry was en- 
joying a boom in the early 1990s, supplying books and magazines 
to neighboring countries, especially to Argentina (which account- 
ed for 75 percent of overseas sales) and Brazil (12 percent). Ex- 
ports of books and magazines grew by 90 percent in 1992 to about 
US$70 miUion. 

Under study in 1992 was a bill to regulate Chile's shrinking but 
still large native old-growth forests, which totaled 7.62 million 



168 



A team of Antofagasta fishermen repairing their nets after the 

morning's catch 
Courtesy Inter -American Development Bank 



169 



Chile: A Country Study 



hectares out of 8.86 million hectares of woodland (the remaining 
1.24 million hectares are plantations). Chile's forestry industry has 
worked mostly on plantations of radiata pine, the raw material used 
for making pulp. But the country's native forests are in need of 
management to avoid extinction or indiscriminate harvesting of 
slow-growing species and the resultant erosion and loss of land for 
future plantations of new species. During 1991, about 107,000 hec- 
tares were planted. 

Energy 

Chile derives its energy mainly from petroleum and natural gas 
(60 percent), hydroelectric power (25 percent), and coal (15 per- 
cent) (see fig. 9). Unlike other countries in Latin America, Chile 
has been able to make effective plans for the development of the 
electricity sector. No bottlenecks are expected in this sector, and 
most analysts predict that it will continue to expand at a healthy 
pace. The country is endowed with ample hydroelectric resources 
and has an extensive electric net formed primarily by hydroelec- 
tric plants. For example, the Tocopilla station feeds electricity to 
the huge Chuquicamata and La Escondida copper mines, as well 
as to cities in northern Chile. An interesting feature of the system 
is that, although the central net is thoroughly interconnected, there 
are many individual producers. Since the late 1980s, there has been 
a marked increase in the importance of small ("other") producers 
(see table 29, Appendix). 

As part of the final stages in the Pinochet regime's privatization 
process, beginning in 1985 the two large state-owned utilities, the 
National Electric Company (Empresa Nacional de Electricidad — 
ENDESA) and the Chilean Electric Company (Compania Chile- 
na de Electricidad — Chilectra), both Corfo subsidiaries, were priva- 
tized. Now the entire electricity sector basically is run by private 
companies. The government, however, established a supervisory 
system that ensures electricity companies a fair return. This keeps 
prices under reasonable control. 

Domestic petroleum production has suffered a steady decline since 
1982, from 2.48 million cubic meters to 1 .38 million cubic meters 
in 1990, a reduction of 46 percent. In an environment of fast eco- 
nomic growth and rising demand for energy, this decline in produc- 
tion has translated into a much faster decline in the share of domestic 
production in total consumption. Although domestic production 
satisfied 35 percent of domestic consumption in 1986, in 1992 it 
met only 13 percent of Chile's needs. Consequently, Chile's oil im- 
port bill more than doubled between 1986 and 1990. The country's 



170 



The Economy 



oil reserves, declining at a rate of 10 percent a year, stood at 300 
million barrels in early 1992. 

Petroleum exploration efforts have been unsuccessful since the 
1970s. The National Petroleum Enterprise (Empresa Nacional de 
Petroleo — ENAP) has diversified its activities outside Chile with 
production contracts with Argentine, Brazilian, Colombian, and 
Ecuadorian companies. Exploration activities have increased in the 
Atacama Desert and the Strait of Magellan. In late 1992, ENAP 
began installing a US$18 million oil-drilling platform off Punta Are- 
nas, the first of four that the company planned to operate in the 
Strait of Magellan in a joint venture with Argentina's state-owned 
oil company. About two-thirds of the crude oil produced in Chile 
came from offshore platforms in the Strait of Magellan. In 1991 
domestic consumption was averaging 138,527 barrels per day (bpd) 
and was growing at a 5 percent annual rate. 

Pipelines for crude oil products totaled about 775 kilometers in 
length; for refined petroleum products, about 785 kilometers; and 
for natural gas, about 320 kilometers. In mid- 1992 Chile and Ar- 
gentina agreed to build a 459-kilometer trans- Andean pipeline, 
designed to carry US$500 million in crude oil a year, or 94,000 
bpd, from Neuquen, Argentina, and to help meet Chile's need for 
refined oil. Both countries also approved a US$1 billion project 
to build a 1,200-kilometer gas pipeline to feed Argentine natural 
gas to Santiago and other Chilean cities by 1997. In 1989 Chile's 
proven natural gas reserves totaled 46.1 billion cubic meters, of 
which 41.9 billion cubic meters were onshore and 4.2 billion cubic 
meters were offshore. 

Banking and Financial Services 

By the end of the Allende period, commercial banks were little 
more than cash vaults. The availability of credit was low, and lend- 
ing patterns were highly distorted. During 1975-90, however, 
Chile's financial sector experienced a remarkable boom, and by 
1992 it was modern and dynamic. Banks performed a variety of 
operations, and the stock exchange was gaining rapidly in impor- 
tance. The development in the 1980s of several financial opera- 
tions involved with servicing Chile's external debt helped to increase 
the sophistication of the system. 

The road to a modern financial sector was not easy. In the 
process, a number of banks collapsed as a result of the credit crisis 
of the early 1980s, and interest rates were high. After a period of 
government control, the failed banks were reprivatized in the 
mid-1980s, and the banking sector went through an extensive con- 
solidation process. Some banks ceased to exist, and others sought 



173 



BOLIVIA 



ARGENTINA 




BRAZIL 

~ 7 



PARAGUAY 



/ 
) u 

J R 



9° r^s. 109° 
W J \^ 10' w 

£Mataveri 27 « _ 
10' s 

j Easier /s/and 

[ Miles (Isla de Pascua) 





Key to Minerals 


Ag 


Silver 


Au 


Gold 


C 


Coal 


Cu 


Copper (mine output) 


Cu 


Copper (refined) 


Fe 


Iron ore 


Li 


Lithium 


Mg 


Magnesium 


Mo 


Molybdenum 


N 


Nitrate 


NG 


Natural gas 


Pb 


Lead 


Pet 


Petroleum 


Zn 


Zinc 


NOTE-Underlined symbol 




indicates plant. 



International boundary 
National capital 
Populated place 
Crude petroleum pipeline 
Petroleum products pipeline 
Projected natural gas pipeline 
Petroleum terminal 
Mine 



Atlantic 
Ocean 

Strait of Magellan 
Pet Pet 

• Beagle Channel 



Source: Based on information from Orlando D. Martino (ed.), Mineral Industries of Latin 
America, Washington, 1988, 32; Carlos M. Bechelli and Roberto D. Brandt "Six 
Latin American Countries Could Join in New Gas Market," Oil and Gas Journal 
October 21 , 1991 , 46-52; and Economist Intelligence Unit, Country Report: Chile 
[London], No. 4, 1993, 20. 

Figure 9. Primary Petroleum, Natural Gas, and Minerals Activity, 1993 



172 



Chile: A Country Study 



mergers. In 1989 the government made the Central Bank indepen- 
dent of government control by creating the Central Bank Coun- 
cil, a five-member group consisting of two members appointed by 
the government, two by the opposition, and a president selected 
by consensus. Beginning in the late 1980s, the number of banks 
became more stable: thirteen domestic banks and twenty-two 
foreign-owned banks. Their level of operation had risen rapidly 
by the early 1990s. Nevertheless, Chile's top seven banks, squeezed 
by growing competition from consumer finance houses and in- store 
credit operations, suffered a 17 percent decline in profits in 1991. 
As a result, the banks were looking to the mining sector for profits. 

Since the economic crisis of 1982-83, a recurrent preoccupation 
of policy makers has been the behavior of interest rates in Chile. 
Many analysts argued that the near collapse of the Pinochet re- 
gime's free-market experiment in those years was the consequence 
of extremely high interest rates. In 1991 and the first few months 
of 1992, interest rates experienced a major decline; this was the 
case for both nominal and real interest rates. As the degree of open- 
ness in the capital account increased, domestic interest rates seemed 
likely to converge toward international levels. 

Transportation 

The heavy regulation of the transportation sector — including rail- 
roads, air transport, marine shipping, and buses — represented a 
tremendous barrier to international competitiveness. For all these 
means of transportation, reforms were enacted in the 1970s that 
were aimed at establishing a competitive environment and widen- 
ing the participation of the private sector. Railroads were greatly 
affected by the imposition of self-financing discipline in the 
mid-1970s. With their infrastructure already failing, financial dis- 
cipline forced further delays in maintenance programs. The growing 
demand for transportation services found a more dynamic response 
in the trucking industry, which developed as a more reliable and 
economic alternative and surpassed railroads in movement of 
freight. 

Chile's internal transport network is basically well developed, 
although in need of considerable improvement. To that end, in 
late 1991 President Aylwin announced a US$2.4 billion public- 
sector investment program, designed to upgrade the neglected trans- 
port infrastructure. There are 7,766 kilometers of railroads (3,974 
kilometers of 1,676-meter gauge, 150 kilometers of 1,435-meter 
standard gauge, and 3,642 kilometers of 1,000-meter gauge), four- 
fifths of which are state-owned (see fig. 10). In addition, there are 
1,865 kilometers of 1,676-meter gauge and eighty kilometers of 



174 



The Krnnnmv 



The Economy 



1,000-meter gauge electrified. The privately owned segment, lo- 
cated mostly in the desert north, totals 2,130 kilometers. A total 
of 8, 185 kilometers of track connect the northern terminal of Iqui- 
que to Puerto Montt in the south. That trunk line is being increas- 
ingly electrified. Feeder lines run westward to the ports and seaside 
resorts and eastward to mines and mountain resorts. Four inter- 
national railroads run to northwestern Argentina and to Bolivia 
and Peru; two of these lines link Chile with Bolivia between Arica 
and La Paz (448 kilometers) and between Antofagasta and La Paz 
via Calama. Except for the international routes to La Paz, pas- 
senger service to the north of Santiago has been suspended. There 
is no passenger service on the Chile- Argentina line. 

The government plans to refurbish and modernize the State Rail- 
road Company (Empresa de Ferrocarriles del Estado). The Ayl- 
win government was planning to invest US$98 million in 
infrastructure improvements in 1993 and was considering the cre- 
ation of joint ventures with private companies to run the cargo trans- 
portation services. The Santiago metro is also to be expanded. 

Roads are the principal means of moving people and freight. 
It was only in the 1960s that a paved road had been completed, 
linking the extreme north with Puerto Montt at the far southern 
tip of the Central Valley (Valle Central), and it was only in the 
mid-1970s that construction began on a north-south road from Puer- 
to Montt into the extreme south. Transversal roads run east and 
west from the north- south highway. These include the northern 
Arica-Santos Highway to Bolivia and the southern Trans-Andean 
Highway between Valparaiso and Mendoza (Argentina). 

Chile's road network totals approximately 79,025 kilometers that 
can be used year-round. Of the total network, 9,913 kilometers 
are paved, including the Pan American Highway (Longitudinal 
Highway), which extends, with the opening of the Southern High- 
way (Gran Carretera Austral) in 1989, about 4,700 kilometers to 
Puerto Yungay in the south. The highway is paved only to Puerto 
Montt. Chile has about 10,000 kilometers of paved road, with the 
region around Santiago and the Central Valley being the best 
served. Gravel roads total 33,140 kilometers, and improved and 
unimproved earth roads total 35,972 kilometers. There are about 
1.7 million motorized vehicles of all kinds in Chile, including more 
than 1 million automobiles and 176,000 trucks and buses. Chile's 
national bus service and Santiago's metro system are considered 
excellent. The 1991-94 program to improve the transportation in- 
frastructure envisages construction of a new metro line in Santiago. 

As befitting a country with such a long coastline, Chile has about 
eighteen ports, but the country has few good natural harbors. Only 



177 




Figure 10. Transportation System, 1993 
176 



Chile: A Country Study 

four or five ports have adequate facilities, and about ten are used 
primarily for coastal shipping. Shipping facilities are used to ca- 
pacity, with a dozen companies engaged in coastal and interna- 
tional trade. Coastal shipping is restricted to Chilean flag vessels. 
The main ports are Antofagasta, Arica, Coquimbo, Iquique, Puerto 
Montt, Punta Arenas, San Antonio, Talcahuano, and, most im- 
portant, Valparaiso. The state controls port organization and ap- 
proximately 40 percent of the merchant marine, which had 
thirty-one ships totaling 756,000 deadweight tons in 1993. Chile's 
inland waterways are navigable for a total of only 725 kilometers, 
mainly in the southern lake district. The Rio Calle Calle provides 
a waterway to Valdivia from at least one lake for ships up to 4,000 
deadweight tons. 

Linking the country's extremes, air transport has also become 
an important way of moving people and freight. Chile has 351 us- 
able airports, forty-eight with paved runways, but none with run- 
ways longer than 3,659 meters. The international airport, in 
Santiago, is served by eighteen international airlines and two na- 
tional ones. The state carrier, the National Airline of Chile (Lmea 
Aerea Nacional de Chile — LAN-Chile), serves major cities in Chile 
and also carries passengers to other countries. Privatized in 1989, 
LAN-Chile merged with a new airline, Southeast Pacific, in 1992. 
LAN-Chile's domestic coverage is supplemented by the services of 
Chilean Airlines (Linea Aerea del Cobre — Ladeco), the airline of 
the state copper company (Ladeco is an acronym for copper airline) 
and Chile's second largest carrier. Ladeco has a 52 percent share 
of passengers, and LAN-Chile has a 46 percent share. LAN-Chile, 
however, controls 84 percent of the international movement of pas- 
sengers, and Ladeco controls 16 percent. In 1992 Fast Air, Chile's 
largest air cargo carrier, incorporated the first of three DC -8 air- 
craft as part of a US$75 million service improvement program. 

Telecommunications 

Chile's Ministry of Transportation and Telecommunications 
oversees the telecommunications sector. The development of this 
natural monopoly (telecommunications) is highly influenced by the 
type of regulations to which it is subjected. In the mid-1980s, Chile 
had an estimated deficit of 300,000 telephone lines. This deficit 
had accumulated through years of deficient management by the 
public sector. It was clear that major investments were needed and 
that the old regulatory framework was outmoded. 

Reforms that directly affected telecommunications occurred in 
1982 and 1985. Before the 1982 reform, Chile's telecommunications 
sector had been dominated by state-owned national companies. 



178 



The Economy 



Santiago and the central part of the country had been served by 
the Telephone Company of Chile (Compama de Telefonos de 
Chile — CTC), a subsidiary of Corfo. The southern part of the 
country was served by two private companies, the National Tele- 
phone Company (Compama Nacional de Telefonos — CNT) and 
the Telephone Company of Coihaique (Compama de Telefonos 
de Coihaique). Another Corfo subsidiary, the National Telecom- 
munications Enterprise (Empresa Nacional de Telecomunicaciones — 
Entel), controlled Chile's international telephone service and much 
of the domestic long-distance service (including Easter Island). 

Following key pricing reforms in 1987, most of the state-owned 
telecommunications firms were privatized during the 1987-89 
period. The National Telephone Company of Spain (Telefonica) 
obtained control of CTC, which has been 50 percent privatized. 
Entel retained its monopolies. 

By 1991 Chile had 768,000 telephones. CTC plans called for in- 
stalling 190,000 new lines in 1992 and investing US$500 million 
in 1993 in expanding and upgrading the telephone network. This 
would permit the installation of 280,000 new lines and the replace- 
ment of the remaining analog switching systems that were serving 
320,000 lines in 1992. In April 1992, however, Chile's monopoly 
commission ordered Telefonica to sell its stake in one of the two 
Chilean telephone companies in which it owned shares — CTC and 
Entel. Telefonica was appealing the decision to the Supreme Court. 

Chile's modern telephone system is based on extensive micro- 
wave relay facilities. The rapid development of cellular telephones, 
digital technology, and satellite links has put even the smallest town 
in Chile within reach. In 1992 telecommunications service increased 
36 percent; CTC had installed more than 900,000 telephone lines 
by that year. 

In 1991 there were 4.25 million radios in the country (see The 
Media, ch. 4). The United States firm Scientific- Atlantic, under 
contract to CTC, built a US$29 million domestic digital satellite 
communications receiving system. Chile was the first South Ameri- 
can country to establish an emergency satellite rescue receiver sta- 
tion. A European Space Agency ERS-1 tracking and command 
station is located in Santiago. 

Chile has 167 AM radio stations, no FM stations, 131 televi- 
sion stations, and 12 shortwave radio stations. Most of these units 
are affiliated with the Association of Chilean Broadcasters (Asocia- 
cion de Radiodifusores de Chile — Archi). Chile uses two Atlantic 
Ocean stations and three domestic satellite ground stations of the In- 
ternational Telecommunications Satellite Organization (Intelsat — 
see Glossary). 



179 



Chile: A Country Study 
Tourism 

Another area of significant new investment is tourism, which 
increased significantly during the 1980s, aided by government efforts 
to promote it both domestically and abroad through the National 
Tourism Service (Servicio Nacional de Turismo — Sernatur). More 
than 1.5 million tourists visited the country in 1992. Sernatur report- 
ed that during 1992 a total investment of US$320 million in hotel 
construction had either already been made or was under consider- 
ation in Vina del Mar, Santiago, Cuenca del Sol in Coquimbo 
Region, and the ski resorts of La Parva and Valle Nevado. For 
the 1992-2007 period, more than US$2 billion is expected to be 
invested in tourism infrastructure projects in Chile. 

One of the most important tourist destinations is Coquimbo 
Region, about forty-eight kilometers north of Santiago. The region 
is considered to have some of the best beaches and climatic and 
geographic conditions in Chile. A US$505 million project to de- 
velop 330 hectares with nine kilometers of beaches north of Co- 
quimbo 's capital, La Serena, was awarded competitively to a 
Spanish-Chilean consortium in 1992. 

Construction 

The relative importance of the construction sector has declined 
significantly since the early 1970s. In 1970 the construction share 
of GDP was almost 8 percent, but by 1992 it had fallen to 6 per- 
cent. This trend is largely the result of a dramatic decline in the 
public sector's construction activities. Whereas in 1970 the public 
sector was responsible for over 30 percent of the total square meters 
constructed, in 1991 this portion had been reduced to 3. 1 percent. 
This trend is partially reflected in a decline in the quality of the 
infrastructure. In order to maintain its pace of growth, Chile must 
reverse this trend. 

The total construction area grew during the 1987-91 period at 
a healthy pace of 12.5 percent per annum. However, all of this 
increase is attributable to the private sector. During this period, 
the yearly area constructed by the public sector declined (see table 
30, Appendix). The sector enjoyed a robust growth of 10 percent 
in 1992 as a result of an increase in housing starts and other con- 
struction projects. 

A significant percentage of private- sector construction is financed 
by the government. In fact, one of the most important innovations 
of the military regime was that the state's role as direct producer 
was gready reduced. Since the late 1970s, the overwhelming majority 



180 



view from the Southern Highway in southern Chile 
Courtesy Inter-American Development Bank 



181 



Chile: A Country Study 

of public works have been executed by private-sector firms under 
government contract. A similar major structural reform has taken 
place in housing for people with low income. Whereas in the 1960s 
and early 1970s houses in this sector were constructed by 
government-owned firms, in the early 1990s they were being built 
by private firms and sold to people with low incomes through an 
elaborate subsidy system (see Housing Policies, ch. 2). 

Income, Labor Unions, and the Pension System 

The modernization of labor-market legislation during the late 
1970s played a fundamental role in the subsequent performance 
of the Chilean economy. Included in this modernization were: re- 
forms in the labor code that assign individual workers the right 
to seek representation in collective bargaining organizations, and 
a reduction in the cost of dismissals. Moreover, the financial re- 
forms in social security and health care removed a major tax bur- 
den from the labor market, as it transformed social security and 
health care taxes into required basic health care programs. In ad- 
dition, the reforms in the financing of education had a tremen- 
dous impact on the allocation of human resources and resulted in 
a significant growth of privately funded technical training programs 
(see Welfare Institutions and Social Programs, ch. 2). The finan- 
cial aspects of these reforms directly affected the efficiency of the 
labor market. For example, pension funds became the largest in- 
stitutional investors of the capital market, representing 26.5 per- 
cent of GDP in 1990 (see Economic Results of the Pensions 
Privatization, this ch.). 

Employment and Unemployment 

According to the 1992 census, the Chilean population totaled 
13,348,401 in that year. The average annual rate of population 
growth in the 1982-92 period was 1 .6 percent, a relatively low rate 
in the context of Latin America. Chile and Argentina are the 
two countries with the lowest rates of population growth in South 
America (see Current Demographic Profile, ch. 2). 

Chile is a highly urbanized country. According to estimates for 
1991, about 85 percent of the population resides in urban areas. 
A large fraction of the population is in the metropolitan area, which 
includes the capital city, Santiago. The population share of this region 
was estimated at slightly more than 39 percent in 1992, which is one 
percentage point higher than the 1982 share. These figures indicate 
that the relative growth of the metropolitan area has slowed down 
compared with the 1970-80 decade, when the rate climbed to 38.1 
percent in 1982 from 35.4 percent in 1970 (see Urban Areas, ch. 2). 



182 



The Economy 



With a lower rate of population growth, Chile's "working-age" 
population, which includes all those individuals above fifteen and 
below sixty-five years of age, represented 64 percent of the total 
population in 1992. The labor force participation rate, or the ra- 
tio of those in the labor force over the "working-age" population, 
was 52.6 percent in March 1992. Thus, 36.8 percent of the total 
population was working or seeking a job (see table 7, Appendix). 
The rate of unemployment has declined steadily throughout the 
period (see table 8, Appendix). The overall rate of growth in em- 
ployment for the 1987-91 period was about 3 percent per year. 
The rate was substantially higher from 1987 to 1989 (5 percent), 
the period of fast recovery after the debt crisis. It is possible that 
the uncertainty regarding the final reforms on the labor legisla- 
tion might have delayed employment creation, but there were other 
important factors, such as an increase in the interest rate. The most 
dynamic sectors during the 1987-89 period were construction and 
industry, with average rates of employment growth of 20 percent 
and 11 percent per year, respectively. 

After years of high unemployment, in the 1990s the trend be- 
gan to change. By late 1993, the rate of unemployment had plunged 
to 4.9 percent, a rate significantly lower that that of the rest of Lat- 
in America, and one of the lowest in Chile's modern history. In- 
terestingly, this drastic reduction in unemployment has taken place 
at the same time as real wages have increased significantly. The 
Economic Commission for Latin America and the Caribbean es- 
timates that average real wages increased by 13.7 percent between 
1990 and 1993. This change in employment conditions has been 
the direct result of the emphasis that Chile's economic model has 
placed on the development of employment-intensive industries. The 
increase in employment has been so impressive that a number of 
analysts have argued that Chile may be running into a period of 
labor shortages (see The Labor Force and Income Levels, ch. 2). 

Income Distribution and Social Programs 

Latin America has traditionally had one of the most unequal in- 
come distributions in the world. Chile has not been an exception 
to this rule. Although data are scarce, existing evidence suggests 
that during the years of military rule income inequality increased 
significantly in Chile. It has been estimated that in 1985 about 25 
percent of households lived in extreme poverty (see Glossary), and 
that 45 percent of households lived below the poverty line. During 
the 1990-93 period, the incidence of poverty declined substantially. 
In late 1993, the Ministry of Planning and Cooperation estimated 
that between 1990 and 1993 more than 1.3 million people moved 



183 



Chile: A Country Study 

out of poverty. This was the result of a combination of factors: the 
rapid rate of growth experienced by the economy; and the im- 
plementation of social programs aimed at the poorest groups in 
society. 

The emphasis on social programs aimed at certain groups be- 
gan in the mid-1970s. This approach seeks to deliver social pro- 
grams directly to the poor, avoiding leakages to middle- and 
upper-income groups. These programs have been largely success- 
ful. It has been reported, for example, that 90 percent of the food 
distributed through the preschool nutritional programs went to the 
poorest three deciles of the population in the mid-1980s. Moreover, 
more than 80 percent of the food has reached the rural poor. Since 
the basic housing program was reformed in the early 1980s, more 
than 50 percent of the subsidies have been reaching the poorest 
three deciles of the population. In 1969, before the system was 
reformed, only 20 percent of subsidies were received by the poorest 
30 percent of the population. 

Unions and Labor Conflicts 

After reluctantly accepting the Labor Plan of 1979, unions be- 
came active again in the early 1980s and were able to push for wage 
concessions during the economic boom of that period. A minority 
maintained a tough stance in opposition to the new system, but 
they lacked significant influence, so opposition eventually disap- 
peared. 

The most radical change experienced by the union movement 
with the return to democracy has been its reintegration into the 
national discussion of labor reforms and social policies. The re- 
forms of 1990-91, which introduced some changes to the original 
Labor Plan, represented a moderate increase in workers' bargain- 
ing power in each of the three central areas of the labor law: dis- 
missals, the right to collective bargaining, and the right of employers 
to hire temporary replacements or to impose lockouts during strikes. 

Law 19,010, enacted in 1990, regulates individual contracts. In 
the area of dismissals, it introduces two important differences rela- 
tive to the previous law — the size of the severance compensation 
and the right of the worker to appeal. Whereas the Labor Plan had 
introduced the practice of dismissals without cause and established 
a severance pay equal to one month's salary per year of service 
up to a maximum of five months' worth, this reform reinstates the 
principle of dismissal only with cause, and it increases the severance- 
pay ceiling to eleven months. The law considers two possible reasons 
for dismissal — the traditional "just cause" (serious misconduct) 



184 



A construction worker 
at the Rio Melado 
Dam spillway, located 
about seventy 
kilometers southeast 
of Talca 
Courtesy Inter-American 
Development Bank 




and the new "economic cause." If the employee appeals and the 
employer fails to prove "just cause," the employer would have to 
pay a 50 percent penalty in addition to the usual severance. Failure 
to prove "economic cause" would result in a 20 percent penalty. 

The previous law was also modified to provide an option to 
replace the normal severance with a "payment in all separations." 
This option is available to workers with more than seven years of 
service with the same employer. If this option is exercised, the em- 
ployer would establish a fund in the worker's name, with monthly 
deposits of a minimum of 4. 1 percent and a maximum of 8.3 per- 
cent of the salary (the salary base having a maximum) in a private 
financial institution. These contributions and the corresponding 
accumulated interest would be nontaxable income and would con- 
stitute a fund that would be withdrawn on separation. 

Law 19,069, enacted in 1991, regulates the rights of employers 
and employees during collective bargaining. Under this law, 
enterprise-level workers' organizations have the right to negotiate 
with employers, and employers are obliged to negotiate with them. 
The law gives the employer the right to limit to thirty-five days 
the period of bargaining with all unions representing the enterprises' 
workers. Under Law 19,069, collective agreements can establish 
pay scales, indexation formulas, fringe benefits, and the like, but 
they cannot limit the sovereignty of the employer over the organi- 
zation and administration of the enterprise (Article 82). 



185 



Chile: A Country Study 



One of the important departures from the previous law is that 
trade unions or workers' associations are given the right to bar- 
gain with more than one employer. Yet this right can only be ex- 
ercised under the following circumstances: in the case of collective 
bargaining affecting more than one enterprise, prior agreement of 
the parties is required (Article 79); submission of collective agree- 
ment by other trade union organizations (such as federations or 
confederations) requires approval by secret ballot of the absolute 
majority of the member workers of the enterprise (Article 110); 
and a given worker cannot be covered by more than one collective 
agreement (Article 83). 

A strike would suspend the individual contract, give employers 
a conditional right to temporary replacement, and give employees 
a conditional right to renounce union membership and return to 
work. Employers can use temporary replacements from the first 
day of the strike if their last offer, before the strike was declared, 
was equivalent to the previous contract adjusted by the consumer 
price index (CPI — see Glossary). If the last offer was lower, em- 
ployers cannot use temporary replacements within a minimum of 
thirty days after the strike is called. Employees have the right to 
renounce union membership and go back to work fifteen days after 
calling the strike, as long as the outstanding offer of the employer 
is equivalent to the last contract adjusted by the CPI. If the last 
offer is lower, employees must delay their walkout a minimum of 
thirty days after the strike is called. The law does not establish a 
maximum duration for strikes, but if more than half of the workers 
return to work, the strike must end. At that point, all workers must 
return to the job. In order to make use of the right to replace workers 
temporarily, employers must make an offer that at least adjusts 
wages by past inflation. If the employer also offers other fringe 
benefits but workers still go on strike, the employer may hire tem- 
porary replacements. However, the employer loses that right if the 
wage adjustment for past inflation is given but some fringe benefits 
are cut. That would not be a contract equivalent to the previous 
one adjusted by inflation. If workers go on strike, the employer 
cannot use temporary replacements within thirty days of the decla- 
ration of the strike. 

It was unclear in 1992 what the final form would be for the new 
legislation on labor-management relations, labor productivity, in- 
vestment, on-the-job training, and other aspects of labor markets' 
performance. However, workers have almost doubled their par- 
ticipation in labor unions since 1983, and by 1990 about 13 percent 
of those employed were affiliated with unions. During 1990, 25,000 
workers, out of 184,000 who participated in collective contracts, 



186 



The Economy 



used strikes as a means of pressing their demands. Most strikes 
during 1990 and 1991 were of short duration (see Labor, ch. 4). 

Economic Results of the Pensions Privatization 

Chile's pension system, which started to operate in May 1981, 
is based on individual capitalization of funds (see Social Security, 
ch. 2). This system determines a minimum basic contribution equal 
to 10 percent of disposable income and makes the benefit a func- 
tion of an individual's contributions during his or her active life. 
Benefits for incapacity and survival are financed by complemen- 
tary insurance with financial reserves. Decree Law 3,500 of 1981 
instituted a social security system that makes contributions obliga- 
tory for dependent workers who joined the labor force after De- 
cember 31, 1982, and makes them voluntary for independent 
workers and those who had already contributed to the traditional 
pension funds. The old pay-as-you-go system, which was being 
phased out, covered all those workers who had entered the labor 
force in 1982 or earlier and who chose not to transfer to the new 
capitalization system. The reform responds to a need that has been 
recognized before, when the old system entered a phase of serious 
financial difficulties. 

In the reformed system, the state now plays a fundamental role 
in regulating and monitoring operations and guaranteeing ' ' solidar- 
ity in the base" through a minimum pension. All workers, after 
contributing a minimum amount (15 percent of their gross income 
annually), have the right to a minimum pension of 85 percent of 
their minimum salary, even if their life- time contributions to the 
system result in a smaller benefit. The new system brought about 
an increase in coverage, with the proportion of independent work- 
ers covered increasing from 58 percent in 1985 to 79 percent in 
1990. The proportion of dependent workers covered increased from 
79 percent in 1985 to 92 percent in 1990. 

Article 28 of Decree Law 3,500 establishes that the numerous 
Pension Fund Administrators (Administradoras de Fondos de 
Pensiones — AFPs) are authorized to charge a fee to cover their 
administrative costs. The most important restriction is that, with 
a few exceptions, fees have to be the same for all affiliates in a given 
AFP. After a relative increase in the fees between 1981 and 1983, 
competition resulted in a steady decline in the cost to individuals. 
In 1990 the cost for an "average contributor" was 33 percent 
lower in real terms than in December 1983. Commissions fell from 
5 percent of taxable income in 1985 to about 3.2 percent in 1990. 
In 1992 the AFPs were charging about 0.9 percent of salary in 



187 



Chile: A Country Study 

insurance premiums and 1.8 percent in commissions, for a total 
of 2.7 percent. 

Strict norms regulate the investment of pension funds. Only cer- 
tain instruments may be used, and there are clear limits on the 
distribution of investments by type of instrument. The dynamism 
of the Chilean capital market since the early 1980s has forced con- 
stant revisions of these norms. Pension funds are the largest institu- 
tional investors in the capital market, representing 26.5 percent 
of GDP in 1990 (compared with 0.9 percent in 1981). The aver- 
age real return to investment of Chilean pension funds between 
1981 and 1990 was 13 percent. In 1992 AFPs were authorized to 
invest up to 3 percent of their portfolios abroad, double the previ- 
ous maximum. 

Macroeconomic Policy, Inflation, and the Balance of 
Payments 

The Central Bank and Monetary Policy 

One of the key lessons of the Chilean reforms is the importance 
of macroeconomic equilibrium in providing the "right" environ- 
ment conducive to economic growth and stability. For all practi- 
cal purposes, by 1988-89 macroeconomic equilibrium had been 
achieved in Chile. 

One of the problems that occupied many scholars and politicians 
in the late 1980s was how to guarantee the continuity of macro- 
economic policy after the military regime. The key issue was how 
to ensure that macroeconomic decisions, and in particular mone- 
tary and exchange-rate policies, would not be determined by par- 
tisan politicians with a short-term mentality. In short, a crucial 
point in the transition's debate was how to remove Central Bank 
decisions from the day-to-day urgencies of politics. This issue was 
seen as particularly important by those economists who argued that 
the politically inspired management of monetary policy was at the 
root of Chile's long history of inflation. 

After much debate, the Pinochet government decided, in 1989, 
to implement a new law that would greatly enhance the indepen- 
dence of the Central Bank. The law made the bank autonomous 
and legally removed it from the area of influence of the minister 
of finance. According to the new legislation, the bank was to be 
governed by a five-member board, the Central Bank Council. Each 
member was to serve for ten years and could only be removed un- 
der a strict set of circumstances. The president of the republic was 
required to obtain Senate approval to name new members of the 
board. 



188 



Monkey-puzzle trees 
(Araucaria araucana) 
of the pine family, 
valued for their beautifully 
veined hardwood and 
plentiful resin, near 
Temuco in southern Chile 
Courtesy Embassy 
of Chile, Washington 



When the new legislative project on Central Bank reform was 
announced in mid- 1989, the members of the opposition denounced 
it as an attempt by the Pinochet regime to perpetuate itself in power. 
However, after some internal debate within the CPD coalition, the 
opposition forces decided to support the project, as long as the mem- 
bers of the initial board were considered unbiased technocrats. After 
a long process of negotiation at the highest level, it was decided 
that the first five members would serve for two, four, six, eight, 
and ten years, respectively; two of them were chosen by the oppo- 
sition, two were chosen by the departing Pinochet government, 
and the chairperson of the board was chosen by consensus. It was 
also decided that the chairperson would serve for two years. In 1992 
the chairperson's two years were up, and a new member of the 
board was chosen as chairperson, this time for ten years. On that 
occasion, the idea of an independent Central Bank was put into 
effect. 

In 1991-92 the Central Bank focused on two issues: the desire 
to reduce the rate of inflation from double digits to single digits; 
and the exchange-rate policy of trying to balance the need for con- 
tinuous promotion of exports with the reduction of inflation. To 
address these issues, the Central Bank used a number of means, 
including the auctioning of Central Bank bills and the acquisition 
of international securities. Also, the bank introduced a series of 
amendments to exchange-rate policy. 



189 



Chile: A Country Study 

Exchange-Rate Policy and the Balance of Payments 

There was broad agreement that the implementation of an 
exchange-rate policy aimed at encouraging exports had been at the 
center of Chile's economic success. Since at least 1985, the mem- 
bers of the Chilean economic team had understood that avoiding 
exchange-rate overvaluation was crucial to the promotion of growth 
and prosperity. As a result, it was decided that a policy based on 
small daily adjustments of the nominal exchange rate would be 
adopted. In this way, exporters would be compensated for any in- 
crease in their domestic costs stemming from inflation. 

Although the basic elements of this "crawling peg" exchange- 
rate policy were maintained during the 1985-92 period, the sys- 
tem went through a number of changes. The first important inno- 
vation was to center the "reference" exchange rate set by the 
Central Bank within a 6 percent band. Market participants were 
allowed to transact freely within the band. A second important 
change was to widen the band to 10 percent and to adjust the refer- 
ence rate downward. Finally, in 1992 the Central Bank decided 
to alter the method used to calculate the daily adjustment of the 
reference rate by using a basket of currencies made up of the dol- 
lar, the German deutsche mark, and the Japanese yen in a 50-30-20 
ratio, instead of only the dollar. 

In early 1990, Chile started to receive increasing amounts of for- 
eign financial flows. This generated an overabundance of foreign 
exchange, which tended to make the exchange rate appreciate. 
From a practical point of view, the increased capital inflows were 
reflected in the fact that the exchange rate moved to the "floor" 
of the band, reducing the amount of real Chilean pesos that each 
exporter received per United States dollar exported. This develop- 
ment affected the profitability of a number of export projects, reduc- 
ing the overall competitiveness of the Chilean economy. Also, the 
real appreciation of the exchange rate affected local industries that 
competed with imported goods, including the agricultural sector. 
Not too surprisingly, exporters have tried to persuade the govern- 
ment to alter its exchange-rate policy in a way that would increase 
their profits. 

In 1991 the pressure of capital inflows subsided somewhat. 
However, this did not end the overabundance of foreign exchange, 
nor did it put an end to the tendency toward real exchange-rate 
appreciation. That year the current account of the balance of pay- 
ments experienced a remarkable turnaround of almost US$1 bil- 
lion (see table 31, Appendix). Consequently, during 1991 the overall 
result was that external accounts were once again positive, with 



190 



The Economy 



the Central Bank accumulating more than US$1 .2 billion, as com- 
pared with US$2.4 billion in 1990. 

Chilean balance of payments trends for 1990-92 generally were 
positive, despite a current account deficit in 1992-93. Although 
the capital account experienced a reversal in 1991, moving from 
a large surplus in 1990 to a modest deficit, in 1992 this tendency 
appeared to be reversing itself once again, with capital inflows ex- 
ceeding outflows. An important aspect of the balance of payments 
data for the early 1990s is the large positive figure for " errors and 
omissions," which was US$161 million in 1991. However, there 
is evidence suggesting that the government's figure represents 
"reversed capital flight" entering the country in an illegal fashion. 
Some observers have claimed that illegal drug-related monies were 
moving toward Chile in the early 1990s (see Incidence of Crime, 
ch. 5). 

Trade Policy and Export Performance 

A fundamental element of the Aylwin government's economic 
program was the maintenance of Pinochet's foreign-trade policy. 
Early on, the forces of the CPD coalition pointed out that an open 
external sector was a fundamental component of their economic 
package. One of the early decisions of the Aylwin government was 
to open the Chilean economy further to international competition. 
This was done by reducing import tariffs from 1 5 percent to 1 1 
percent, except for expensive luxury goods or commodities governed 
by a price band. 

Data on exports for the 1989-91 period reveal three telling de- 
velopments. First, the share of traditional mining exports showed 
a clear downward trend. Second, there was a significant increase 
in the shares of the agricultural and manufacturing sectors. (In 1991 
fruits and forest products constituted 85 percent of total exports, 
and the agricultural sector accounted for about US$1.2 billion, or 
about 14 percent of total exports.) Third, an increasing propor- 
tion of manufacturing exports were going to industrial countries 
(see table 32, Appendix). 

Exports in 1991 showed a noteworthy increase in shipments 
toward other Latin American countries. Chile signed a trade ac- 
cord with Argentina and in 1992 was working on a trade accord 
with Venezuela and Colombia. In 1991 Chile signed a bilateral 
free-trade agreement with Mexico, under which each country would 
gradually reduce tariffs on three categories of products. The Chile- 
Mexico bilateral accord, which took effect on January 1 , 1993, called 
for the removal of tariffs on almost all of Chile's trade with Mexi- 
co by about 1996. Chile was hesitant in the early 1990s to join the 



191 



Chile: A Country Study 

other countries in South America in participating in regional trading 
agreements, such as the Southern Cone Common Market (Mer- 
cado Comun del Cono Sur — Mercosur; see Glossary), or the 
renewed Andean Group (see Glossary). By early 1994, however, 
Chile was ready to join Mercosur and was expected to become a 
member in January 1995. 

Chile's exports were also moving rapidly beyond the scope of 
Latin America. An important goal in the area of trade diplomacy 
was a free-trade agreement with the United States. On October 
1, 1990, Chile and the United States signed a framework agree- 
ment on trade and investment aimed at negotiation of a proposed 
Chile-United States free-trade accord similar to the North Ameri- 
can Free Trade Agreement (NAFTA; see Glossary) among the 
United States, Mexico, and Canada. The United States remained 
Chile's most important trade partner, although in 1991 the value 
of Chilean exports to Japan surpassed the value of exports to the 
United States by US$10 million, and in 1992 the figure rose to 
at least US$52 million. Japan accounted for US$900 million of 
Chile's US$1.5 billion surplus in 1991. 

The Future of the Economy 

In early 1994, the Chilean economy stood out as one of the strong- 
est in Latin America. Moreover, President-elect Eduardo Frei 
Ruiz-Tagle had stated that his administration would continue the 
export-oriented, market-based policies of Aylwin and Pinochet. 
Frei's minister-designate of finance, Harvard-educated Eduardo 
Aninat Ureta, publicly endorsed the main aspects of the current 
economic model. However, the trend in the early 1990s toward 
real exchange-rate appreciation clouded the future of the export 
sector. 

However, there are still some areas of concern. Most of the 
growth in Chile in the early 1990s was the result of a combination 
of increased capacity utilization and improvements in productivi- 
ty. The contribution of capital accumulation to growth has remained 
relatively low. Despite increases, in 1992 total capital investment 
barely surpassed 20 percent of GDP. Historical data from other 
parts of the world are emphatic in indicating that high rates of capital 
formation (see Glossary) are required to sustain growth in the longer 
run. Data for 1993 suggest that there has been a remarkable in- 
crease in savings (see table 33, Appendix). In the years to come, 
it will be fundamentally important to maintain (or even to increase) 
the savings effort. 

A second and related area of concern has to do with infrastruc- 
ture. Although in the case of Chile the situation is not as dire as 



192 



Buses on Avenida Bernardo O'Higgins in downtown Santiago 
Courtesy Inter-American Development Bank 

in other Latin American countries, Chile needs to continue to main- 
tain and improve its infrastructure. With the already active par- 
ticipation of the private sector in important projects, the selective 
participation of the government as the main entrepreneur is clear- 
ly needed. 

A third concern is the environment, where two problems are par- 
ticularly acute. The first one is air pollution in Santiago. The Ayl- 
win government decided to address this issue in a rather gradual 
way. Whether this is the most effective and efficient approach is 
unclear. The second serious problem is ocean pollution, especially 
in the more densely populated coastal areas. 

An important fourth area to focus on in the future is the battle 
against poverty. President-elect Frei stated that this would indeed 
be a priority for his administration. The appointment of Carlos 
Massad Adub, a well-respected, University of Chicago-trained 
economist, to the Ministry of Health indeed suggests a high com- 
mitment to social services. In that regard, an increase in the ag- 
gressiveness of targeted social programs seemed to be the most 
promising avenue. An important question, however, is where to 
obtain the resources. This is not easy to answer, but creative solu- 
tions, including a possible reduction in the military budget in the 
years to come, are among those that might be contemplated. 



193 



Chile: A Country Study 



* * * 

A number of fine sources provide information on the recent trans- 
formation and performance of the country's economy. These in- 
clude Jere Behrman's Foreign Exchange Regimes and Economic 
Development: Chile, Vittorio Corbo's Inflation in Developing Countries, 
Ricardo Ffrench-Davis's Politicas economicas en Chile, 1952-1970, 
Markos J. Mamalakis's Historical Statistics of Chile, and Gonzalo 
Martner's El pensamiento economico del gobierno de Allende. 

The literature on the economic reforms of the mid-1970s and 
1980s is extensive. Comprehensive studies include Una decada de 
cambios economicos: La experiencia chilena, 1973-1983 by Alvaro Bardon, 
Camilo Carrasco M. , and Alvaro Vial G. ; Monetarism and Liberali- 
zation, by Sebastian Edwards and Alejandra Cox Edwards; and The 
National Economic Policies of Chile, edited by Gary M. Walton. Tar- 
sicio Castaneda's Combating Poverty provides a first-rate analysis of 
Chile's highly praised approach to social programs. In La revolu- 
cion laboral en Chile and El cascabel al gato, Jose Pinera Echenique 
offers an insider's account of two of the most important and politi- 
cally difficult reforms in the Chilean social and economic system: 
the labor decrees and the social security system. 

Much of the literature on the Chilean economy appears in arti- 
cle form in scholarly and professional journals or in edited volumes. 
In Chile three journals are particularly important. One is Colec- 
cion de Estudios de CIEPLAN, published by a Christian Democratic- 
leaning think tank, the Corporation for Latin American Econom- 
ic Research (Corporacion de Investigaciones Economicas Para 
America Latina — Cieplan). Early issues of this journal examine 
the economic thinking of many of the Aylwin government's eco- 
nomic officials. Other issues contain some of the more severe criti- 
cisms of the Pinochet economic policy. Cuadernos de Economia, 
published by the Catholic University of Chile, provides somewhat 
technical pieces on the evolution of the Chilean economy. Most 
of these are written by economists who sympathized with the 
Pinochet regime. A number of important pieces on the evolution 
of the Chilean economy have appeared only in the form of work- 
ing papers. Although it has sometimes been difficult to gain access 
to these documents, a list of the most important can be found in 
the Bibliography. Estudios Publicos, published by the Centro de Es- 
tudios Publicos, is a multidisciplinary journal devoted to public 
policy. It has published important debates, with different positions 
being duly represented. 

Current data on monetary variables, balance of payments, na- 
tional accounts, and employment have been published periodically 



194 



The Economy 



by the Central Bank. The National Statistics Institute (Instituto 
Nacional de Estadfsticas — INE) is a major source of basic infor- 
mation. The Economic Commission for Latin America and the 
Caribbean, with offices in Santiago, also is a valuable source of 
economic and social data for Chile and all other Latin American 
countries. (For further information and complete citations, see Bib- 
liography.) 



195 



Chapter 4. Government and Politics 



A masculine textile figure (kolumameU) from the reverse side of a seventeenth- 
century Mapuche woman 's belt called nimintraruwe 



THE REESTABLISHMENT OF DEMOCRATIC government 
in March 1990 once again thrust Chile into the international 
limelight. In the early 1970s, the long, narrow country on the west 
coast of South America had drawn widespread attention by elect- 
ing a Marxist president, Salvador Allende Gossens (1970-73), who 
was intent on forging a new path to socialism. Following Allende 's 
overthrow on September 11, 1973, Chile under military rule be- 
came notorious for some of the worst excesses of modern-day 
authoritarianism . 

Headed by General of the Army Augusto Pinochet Ugarte 
(1973-90), the dictatorship was widely reviled for ending Chile's 
tradition of democratic politics and committing numerous viola- 
tions of human rights. Although isolated politically, Chile's mili- 
tary government earned international acclaim for far-reaching 
economic and social reforms that transformed the country's state- 
oriented economy into one of the most open economic systems in 
the developing world. The economic reforms of the late 1970s and 
1980s set the foundation for extraordinary investment and growth 
in the early 1990s. Economic progress, combined with the return 
of democratic politics largely devoid of the confrontation and polar- 
ization of the past, positioned Chile to enter the twenty-first cen- 
tury with increased prosperity in a climate of peace and freedom. 

Chile's favorable situation developed because the military govern- 
ment's success at implementing an economic revolution was not 
duplicated in the political arena. From the outset, Pinochet and 
his colleagues had sought to displace the parties, politicians, and 
institutions of the past so that they might create a nation of pliant 
and patriotic citizens, devoted to their private pursuits under the 
tutelage of a strong and benevolent state with merely a facade of 
representative government. 

However, the military commanders badly underestimated the 
strength of the nation's traditional political parties and failed to 
understand the degree to which democratic practices and institu- 
tions had become a fundamental part of Chile's national charac- 
ter. Indeed, Pinochet was forced to abandon his plan for virtual 
life-long rule after a humiliating personal defeat in a 1988 plebi- 
scite (see Glossary) at the hands of the very civilian leaders whom 
he had reviled and persecuted. Their resilience made possible the 
transition to democracy in March 1990 and the success of Chile's 
first civilian government after seventeen years of authoritarian rule. 



199 



Chile: A Country Study 



Chile's transition back to democracy encountered serious 
challenges. Although opposition groups had vehemently rejected 
the Pinochet government's constitution of 1980 as illegitimate and 
undemocratic, they were forced to accept the political rules and 
playing field as defined by the military government in order to 
challenge its very authority. To a greater degree than most other 
transitions to democracy in Latin America, Chile's was accom- 
plished within the framework of an institutional order conceived 
by an authoritarian regime, one that continued to define the po- 
litical game long after the return to representative government. 
Pinochet was unable to destroy his adversaries or project his own 
presidential leadership into the future, but he succeeded in im- 
posing an institutional legacy that Chile's civilian elites would 
have to modify substantially if Chile were to become fully demo- 
cratic. 

Constitutional History 

Development and Breakdown of Democracy, 1830-1973 

Following the wars of independence and several failed experi- 
ments in institution building, Chile after 1830 made steady progress 
toward the construction of representative institutions, showing a 
constancy almost without parallel in South American political his- 
tory. From 1830 until 1973, almost all of Chile's presidents stepped 
down at the end of their prescribed terms in office to make way 
for constitutionally designated successors. The only exceptions to 
this pattern occurred in 1891, after a brief civil war; in the turbu- 
lence from late 1924 to 1927, which followed the military's inter- 
vention against the populist President Arturo Alessandri Palma 
(1920-24, 1925, 1932-38); in 1931, when several chief executives 
resigned under pressure and military officers intervened directly 
in politics; and in 1932, when the commander of the Chilean Air 
Force (Fuerza Aerea de Chile — FACh), Marmaduke Grove Vallejo, 
proclaimed his short-lived Socialist Republic. For most of its his- 
tory, Chile was governed by two charters — the constitution of 1833 
and the constitution of 1925, which drew heavily on its nineteenth- 
century predecessor. 

Under the 1833 document, Chilean presidents, notably Manuel 
Bulnes Prieto (1841-51) and Manuel Montt Torres (1851-61), 
presided over the gradual institutionalization of representative prac- 
tices and a gradual expansion of suffrage, while exercising strong 
executive authority. By the 1870s, the president was being chal- 
lenged by increasingly cohesive political parties, which, from 
their vantage point in the National Congress (Congreso Nacional; 



200 



Government and Politics 

hereafter, Congress), sought to limit executive prerogatives and 
curb presidential intervention in the electoral process. 

With the assertion of congressional power, presidents were limited 
to one term, and their control over elections was circumscribed. 
However, it took the Civil War of 1891 to bring to an end the chief 
executive's power to manipulate the electoral process to his advan- 
tage. The victory of the congressional forces in that conflict inau- 
gurated a long period in which Congress was at the center of 
national politics. From 1891 until 1924, presidents were required 
to structure their cabinets to reflect changing legislative majori- 
ties, and the locus of policy making was subject to the intrigues 
and vote trading of the legislature. 

Although politics during the parliamentary period was often 
chaotic and corrupt, Chile enjoyed unusual prosperity based on 
a booming nitrate trade and relatively enlightened leadership. Po- 
litical parties, whose activities had once been limited to the cor- 
ridors of Congress, soon engaged the interests and energies of 
Chileans at every level of society. The parties thus provided the 
basis for an open, highly competitive political system comparable 
to those of Europe's parliamentary democracies. The competitive- 
ness of Chilean politics permitted the emergence of new interests 
and movements, including the Communist Party of Chile (Parti- 
do Comunista de Chile — PCCh) and the Socialist Party (Partido 
Socialista), representing a growing and increasingly militant 
proletariat. 

The collapse of nitrate exports and the crisis brought on by the 
Great Depression (see Glossary) of the 1930s discredited the poli- 
ticians of Chile's oligarchical democracy and encouraged the growth 
of alternative political forces. From 1924 to 1931, Chile was buffeted 
by political instability as several presidents resigned from office and 
Carlos Ibanez del Campo (1927-31, 1952-58), a military officer, 
rose to power on an antipolitics platform. In 1925 a new constitu- 
tion was approved. Although it did not deviate substantially from 
previous constitutional doctrine, it was designed to shift the balance 
of power from Congress back to the president. 

By the second and third decades of the twentieth century, Chile 
was facing some of the same challenges confronting the nations of 
Europe. Parliamentary democracy had fallen into disrepute as 
the machinations of corrupt elites were challenged by both fas- 
cism and socialism, doctrines that stressed social as opposed to po- 
litical rights and that sought to expand the power of the state in 
pursuing them. Precisely because of its tradition of competitive pol- 
itics and the strength of its political parties, Chile was able to with- 
stand the challenge of alternative ideologies without experiencing 



201 



Chile: A Country Study 

the breakdown of democratic authority that swept the South Ameri- 
can continent. 

Chilean politics changed dramatically, however, as a multiparty 
system emerged without exact parallel in Latin America, one in 
which strong Marxist parties vied with conservative parties, while 
pragmatic centrist parties attempted to mediate. In this polarized 
context, presidents governed with shifting coalitions, pushing the 
country alternately to the right or left, depending on the particu- 
lar political configuration of the moment. Although the left gained 
ground throughout the 1940s and 1950s, the right maintained elec- 
toral clout by blocking efforts to bring congressional representa- 
tion into line with new demographic trends. This was not a period 
of policy stalemate, however. By encouraging a policy of import- 
substitution industrialization (see Glossary) and expanding social 
welfare programs, the Chilean state markedly increased its role in 
national life. 

In the aftermath of the Cuban Revolution of 1959, Chilean pol- 
itics changed in a qualitative sense. With the 1964 election of a 
Christian Democratic government under the leadership of Presi- 
dent Eduardo Frei Montalva (1964-70), Chile embarked on an ex- 
periment in reformist politics intended to energize the economy 
while redistributing wealth. Frei and his colleagues were determined 
to modernize the country through the introduction of significant 
social reforms, including an extensive agrarian reform that would 
bring an end to the concentration of economic power in the hands 
of rural landlords. 

Frei's government accomplished many of its objectives. In push- 
ing for change, however, the president broke the tacit alliance with 
the right that had made his election possible. His attempt to co- 
opt part of the program of the left and mobilize followers in tradi- 
tionally leftist constituencies also threatened the Marxist parties. 
By the end of the 1960s, the polarization of Chilean politics had 
overwhelmed the traditional civility of Chile's vaunted democrat- 
ic institutions. The centrist agreements of the past, which had en- 
abled presidents to navigate a difficult course of compromise and 
conciliation, now became more difficult to attain. 

In a reflection of Chile's increased ideological polarization, Al- 
lende was elected president with 36.2 percent of the vote in 1970. 
Unable or unwilling to form coalitions, the left, center, and right 
had all nominated their own candidates in the mistaken hope of 
obtaining a majority. Allende's Popular Unity (Unidad Popular) 
government drew initially on the congressional support of the Chris- 
tian Democrats, whose backing made his election possible in the 
congressional runoff on October 24, 1970. However, the left 



202 



Government and Politics 



increasingly pushed to implement its agenda without building po- 
litical bridges to the ''bourgeois parties." Like Frei before him, 
Allende was convinced that he would be able to break the dead- 
lock of Chile's ideologically entrenched multiparty system and create 
a new majority capable of implementing his revolutionary agenda. 
Once this effort failed, Allende 's attempts to implement his pro- 
gram by decree only heightened opposition to his policies. Finally, 
the president's failure to make substantial gains from his electoral 
victory in the March 1973 congressional elections meant that he 
would be unable to obtain the necessary congressional majority to 
implement his legislative objectives (see table 34, Appendix). In 
an atmosphere of growing confrontation, in which moderates on 
both sides failed to come up with a regime-saving compromise, the 
military forces moved in to break the political deadlock, establish- 
ing the longest and most revolutionary government in the nation's 
history. 

Imposition of Authoritarian Rule 

The military commanders took power in a violent coup on Sep- 
tember 11, 1973, accusing Allende, who committed suicide dur- 
ing the takeover, of having violated the constitution. Within months, 
however, it became apparent that the new regime blamed the break- 
down of democracy not only on the parties of the left and the 
Marxist president but also on the institutional framework embod- 
ied in the constitution of 1925. In the military's view, Chile's con- 
stitution had encouraged the rise of venal parties and politicians 
preoccupied not with the broader welfare of the country but with 
their own interests and hunger for power. The military blamed what 
they viewed as self-serving politicians for allowing foreign ideolo- 
gies to penetrate the nation, thereby creating an internal threat 
that the armed forces felt obliged to confront. 

Within days of the coup, the new government appointed a com- 
mission of conservative scholars to begin crafting a new constitu- 
tional order. However, after initial enthusiasm for their work, 
commission members soon discovered that institutional reform was 
not a top priority of the authorities and that the junta was in no 
hurry to set a timetable for its own departure. The military's 
primary goal was to revitalize the economy, while destroying the 
parties of the left and rendering obsolete the parties and leaders 
of other stripes. 

In 1978, however, a power struggle within the junta between 
Pinochet, commander of the Chilean Army (Ejercito de Chile), 
and Gustavo Leigh Guzman, the FACh commander, forced the 
military government to come to terms with its blueprint for the 



203 



Chile: A Country Study 

future of the country. Leigh resented the growing power and in- 
fluence of Pinochet, his putative equal in the junta, and sought 
to force an early conclusion to the transition back to civilian rule 
in a form similar to the constitutional framework of the immedi- 
ate past. Pinochet, basking in the power and authority of an ex- 
ecutive with access to a powerful secret police network, the National 
Information Center (Centro Nacional de Informacion — CNI), 
which replaced the National Intelligence Directorate (Direction Na- 
cional de Inteligencia — DINA) in 1977, had no enthusiasm for an 
early return to civilian rule; rather, he hoped to institute more far- 
reaching transformations of Chile's institutions. The junta presi- 
dent was an admirer of long-time Spanish dictator Francisco Franco, 
whose 1975 funeral he had attended in one of his few trips abroad. 
Pinochet also viewed Franco's political system as a model for Chile, 
one in which the armed forces could play a permanent guiding role. 
When Leigh was forcibly dismissed from the junta in April 1978, 
in a veritable coup within a coup, Pinochet's position became un- 
assailable. Within months, Pinochet instructed the constitutional 
commission, which had languished with no clear purpose, to 
produce a new constitution with a time frame more to his liking. 
When the Council of State (Consejo de Estado), headed by for- 
mer president Jorge Alessandri Rodriguez (1958-64), softened some 
of the provisions of the draft and proposed a return to civilian rule 
by 1985, Pinochet balked and demanded a new, tougher version. 

The "permanent" articles of the draft were designed to go into 
effect a decade after promulgation, and Pinochet was specifically 
named to preside over the country's fortunes for an eight-year 
"transition" period. Pinochet further insisted that he be named 
to fill the first eight-year term of the "constitutional period" that 
followed, which would begin in 1990. The president's advisers, 
however, were able to persuade him that ratification of the consti- 
tution in a plebiscite could be seriously jeopardized if it were too 
apparent that Pinochet would obtain an additional sixteen-year 
mandate. 

To satisfy Pinochet's ambitions, the designers of the constitu- 
tion provided for a plebiscite to be held in late 1988 or 1989 on 
a single candidate to be designated by the four commanders of the 
armed forces (army commander Pinochet included) to lead the 
country in the next eight-year term. In an obscure provision, the 
text specifically exempted Pinochet from the article barring presi- 
dents from reelection, a clear sign that the general had every in- 
tention of perpetuating himself in power. 

With the ratification of the constitution of 1980, in a highly ir- 
regular and undemocratic plebiscite characterized by the absence 



204 



Government and Politics 



of registration lists, Pinochet achieved his objectives. Chile's 
democratic parties had proved incapable of challenging the power 
of the military to impose its own blueprint for the future. After 
seven years of constitutional ambiguity and questionable political 
legitimacy, the military's sweeping control over virtually every 
aspect of public life had become codified and sanctioned in an 
elaborate "democratic" ritual, which the authorities believed fi- 
nally conferred on them the legitimacy of the popular will. With 
the economy at last on the upswing and a majority of voters resigned 
to accepting military rule as the only means of ensuring order and 
prosperity, Pinochet seemed invincible. As if to signal the govern- 
ment's renewed confidence and continuing contempt for its politi- 
cal opponents, Andres Zaldivar, the highly respected president of 
the Christian Democratic Party (Partido Democrata Cristiano — 
PDC), was exiled for daring to question the plebiscite's results. 

The Constitution of 1980 

The constitutional document imposed by the regime in 1 980 con- 
sisted of 120 "permanent" articles, which went into full effect af- 
ter the transition to "constitutional government." The document 
also included thirty-four "transitional" articles applying to the tran- 
sitional period from March 1 1 , 1980, to March 1 1 , 1990. The tran- 
sitional articles provided the regime with sweeping powers and 
outlined the procedures for the 1988-89 plebiscite on constitutional 
amendments and the election of a legislature. The most controversial 
provision was Transitional Article 24, which eliminated due process 
of law by giving the president broad powers to curtail the rights 
of assembly and free speech and to arrest, exile, or banish into in- 
ternal exile any citizen, with no rights of appeal except to the presi- 
dent himself. 

The "permanent" articles of the constitution were intended to 
create a "modern and protected democracy," an authoritarian ver- 
sion of representative government that guarantees "national secu- 
rity" by severely circumscribing the will of the people. This was 
to be accomplished in three ways: through the establishment of a 
permanent role for the armed forces as "guarantors" of the na- 
tion's institutions; through the imposition of restrictions on politi- 
cal activity, including the banning of movements or ideologies 
hostile to democracy; and through the creation of institutional 
mechanisms that would limit popular sovereignty. 

The cornerstone of the military regime's constitutional doctrine 
was, according to the 1980 document, the establishment of a per- 
manent tutelary role for the armed forces. The principal manifesta- 
tion of this "tutelage" was, according to the 1980 document, the 



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Chile: A Country Study 

National Security Council (Consejo de Seguridad Nacional — 
Cosena), a body composed of eleven members, eight of whom have 
enjoyed full voting rights since 1989 and only two of whom were 
to be elected officials (Article 95). Voting members consisted of 
the president of the republic, the president of the Senate of the 
Republic (Senado de la Republica; hereafter, Senate), the presi- 
dent of the Supreme Court (Corte Suprema), the commanders in 
chief of the armed forces, and the director general of the Carabineros 
of Chile (Carabineros de Chile). This arrangement provided mili- 
tary leaders with an absolute majority on any Cosena vote. Non- 
voting members included the ministers of defense; economy, 
development, and reconstruction; finance; foreign relations; and 
interior. 

The 1980 constitution prescribed that Cosena could "express 
to any authority established by this constitution its opinion regarding 
any deed, event, act, or subject matter, which in its judgment grave- 
ly challenges the bases of the institutional order or could threaten 
national security" (Article 96). Cosena was thus empowered to ad- 
monish top government leaders and institutions, including Con- 
gress and the president, on any matter Cosena deemed relevant 
to the nation's security as Cosena defined it. Although the fun- 
damental law did not specify what would transpire should an 
authority ignore Cosena' s opinion, the framers clearly intended 
to give the armed forces constitutional authority to take matters 
into their own hands should their views be ignored. 

The 1980 constitution also gave Cosena significant powers of 
"authorization" and "nomination." The constitution required the 
president to seek approval from Cosena to impose any state of ex- 
ception (see Glossary) and gave the council authority to solicit any 
information it deemed necessary in "national security" matters 
from any government agency. Under the 1980 charter, Cosena was 
also empowered to name four of the nine designated members of 
the Senate and two of the seven members of the powerful Con- 
stitutional Tribunal (Tribunal Constitucional), whereas the presi- 
dent and the Senate could nominate only one each. Finally, only 
Cosena could remove military commanders. 

Perhaps the most significant protection of military prerogatives 
was provided by Article 93 , which severely limits civilian control 
over the armed forces. Although the president names the com- 
manders of each of the military services and the director general 
of the Carabineros, nominees must be selected from a list of the 
five highest-ranking officers with greatest seniority. Once a com- 
mander is appointed, that appointee is safe from presidential 



206 



Government and Politics 



dismissal for the duration of the individual's four-year term, un- 
less qualified charges are brought against the person. 

A second set of instruments for the establishment of a "protect- 
ed" democracy excluded from political life those individuals, par- 
ties, or movements whose views and objectives are judged hostile 
to democracy. The language of Article 8 was aimed specifically at 
the parties of the Marxist left, although it could be applied to other 
groups and movements as well. According to the article, "any act 
by a person or group intended to propagate doctrines that are an- 
tagonistic to the family or that advocate violence or a totalitarian 
concept of society, the state, or the juridical order or class struggle 
is illicit and contrary to the institutional order of the Republic." 
Furthermore, any organization, movement, or political party that 
supports such aims is deemed unconstitutional. Article 19 barred 
parties from intervening in any activities that are "foreign to them, ' ' 
including the labor movement and local or community politics. Fi- 
nally, Article 23 and Article 57 specifically barred leaders of "in- 
termediate groups," such as unions, community organizations, and 
other associations, from leadership of political parties, and vice ver- 
sa; deputies or senators could lose their seats for acting directly 
on such groups' behalf. 

Third, the military regime sought to limit the expression of popu- 
lar sovereignty by placing a series of checks on government insti- 
tutions whose existence derives from popular consent. The most 
dramatic example was the elimination of elected local governments. 
Since colonial times, Chileans had elected municipal governments 
with considerable local powers and autonomy. Although modern 
local governments were limited in their efficacy by the overwhelming 
power and financial resources of the state, participation and in- 
terest in local politics had always been high. Article 32 of the con- 
stitution called for the direct presidential appointment of regional 
intendants (intendentes) , governors (gobernadores) of provinces, and 
mayors {alcaldes) of large cities. Other mayors could be appointed 
by provincial corporative bodies (see Regional and Local Govern- 
ment, this ch.). 

Reversing Chilean democratic practice, the constitution creat- 
ed an exaggerated presidentialism, severely limiting the preroga- 
tives of Congress. Article 32 was particularly dramatic, giving the 
president the power to dissolve the lower house, the Chamber of 
Deputies (Camara de Diputados), at least once in the chief ex- 
ecutive's term. Popular representation in Congress was to be 
checked through the appointment of nine "designated" senators, 
more than a fourth of the thirty-five-member chamber. Finally, 
the constitution made any reform in the basic text extremely difficult 



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Chile: A Country Study 



to implement by requiring the concurrence of the president and 
two succeeding legislatures, each of which would have to approve 
an amendment by a three-fifths vote. 

Authoritarianism Defeated by Its Own Rules 

The reversal of fortune for Chile's democratic opposition came 
very gradually. After massive protests in 1983, spearheaded by labor 
leaders buoyed by mass discontent in the wake of a sharp down- 
turn in the nation's economy, party leaders sought to set aside their 
acrimonious disputes and make a collective effort to bring an end 
to the military government. By this point, even influential elements 
on the right were signaling their displeasure with the personaliza- 
tion of power, fearing that a prolongation of the Pinochet regime 
would only serve to radicalize Chilean politics further and set the 
stage for a popular uprising that would overwhelm the authorities. 

But Pinochet seemed to relish the challenge of taking on the op- 
position and was determined to carry out his self-appointed man- 
date to reshape Chile's economic and political systems. In a strategic 
retreat made under pressure from regime moderates, Pinochet brief- 
ly permitted officials to open a dialogue with democratic opponents, 
only to refuse to make any change in the formula for transition 
outlined in the constitution of 1980. In response to the continuing 
wave of protests, Pinochet declared a state of siege in November 
1984 that included a crackdown on all demonstrations. 

In August 1985, after months of delicate intraparty negotiations 
backed by Chile's Roman Catholic cardinal Juan Francisco Fres- 
no, a broad alliance of eleven political groups, from center-right 
to socialist, signed a document entitled the National Accord for 
Transition to Full Democracy. It called for a gradual transition 
to civilian rule without specifying a particular timetable; legaliza- 
tion of all political activity; an end to restrictions on civil liberties; 
and free, direct presidential elections rather than the plebiscite con- 
templated in the constitution of 1980. The signing of the accord 
by such an array of groups meant that for the first time since 1973 
Pinochet could no longer claim majority support. The regime ap- 
peared vulnerable, and many Chileans began to believe that 
Pinochet would agree to relinquish power. 

However, the accord soon lost its momentum as Pinochet and 
his aides worked skillfully to sow mistrust and rancor within the 
fragile alliance. The general refused to acknowledge the accord's 
existence or meet with its leaders, despite a personal plea from 
Cardinal Fresno. 

In the face of a determined military leader, opposition forces were 
at a clear disadvantage. They had no coherent strategy to force 



208 



Government and Politics 



the regime to accept their point of view. The far left, which had 
refused to endorse the accord, hoped for a Sandinista-style insur- 
rection that would drive Pinochet from power and give the PCCh 
and its allies, which included clandestine armed groups, the up- 
per hand in the formation of a "provisional" alternative govern- 
ment. The moderate opposition envisioned a completely different 
scenario: some kind of breakdown of military support for Pinochet 
in response to peaceful civilian discontent, followed by free elections. 

With the erosion of support for the National Accord, the Chilean 
opposition fell back into partisan and ideological quarrels. After 
years without national, local, or even internal party elections, op- 
position leaders were frozen in past disputes, incapable of gaug- 
ing popular support for various policies. Given the parties' stasis, 
student elections on Chile's university campuses became bellwethers 
of political opinion. Often, the Christian Democratic and Com- 
munist candidates for student offices proved far more willing to 
compromise and form working alliances than their older coun- 
terparts. 

The dramatic attempt on Pinochet's life by the Manuel 
Rodriguez Patriotic Front (Frente Patriotica Manuel Rodriguez — 
FPMR) in September 1986 further weakened the general's divid- 
ed opponents and temporarily strengthened his own grip on pow- 
er. The elaborately planned attack by the PCCh-linked group, in 
which commandos stormed Pinochet's motorcade on a hillside road 
outside Santiago, left five bodyguards dead but the general un- 
harmed. Conservatives rallied around the regime, Christian 
Democrats and moderate Socialists distanced themselves from the 
Communists, and the Western democracies tempered their sup- 
port of the opposition movement. Over the ensuing months, several 
new campaigns by the democratic opposition fizzled, including a 
movement of prominent citizens calling for free elections. Key op- 
position leaders, notably Christian Democrat Patricio Aylwin Azo- 
car, began to emphasize the wisdom of trying to take on the regime 
in the upcoming plebiscite, rather than pressing for free elections. 

As 1987 began, Pinochet and his aides confidently started plan- 
ning for the presidential plebiscite. The economy was showing signs 
of recovery. The Marxist left, decimated by arrests and executions 
following the attack on Pinochet, was discredited. The democratic 
opposition was torn between those who accepted the regime's tran- 
sition formula and those who denounced it as illegitimate. Moderate 
conservatives and some regime insiders, including the chiefs of 
the FACh and the Carabineros, urged Pinochet to permit open 
elections or to allow a candidate other than himself to stand for 
office. But the general was surrounded by sycophants who assured 



209 



Chile: A Country Study 



him that he was the only man capable of saving Chile from anar- 
chy and chaos. Pinochet viewed politicians as demagogues deter- 
mined to reverse the accomplishments of the military regime that 
only he, as a patriotic, self-sacrificing soldier, could defend in the 
face of a life-and-death threat from the communist foe. 

On August 30, 1988, Chile's four military commanders met in 
secret deliberation and unanimously nominated the seventy-three- 
year-old Pinochet to run for president in a plebiscite that would 
take place in just five weeks, on October 5. Any commander who 
might have opposed General Pinochet did not do so, apparently 
because of a belief in the principle of military unity, or because 
of intimidation by Pinochet's power. The vast resources of the re- 
gime were already mobilized to ensure Pinochet's victory. Mili- 
tary provincial governors and civilian mayors, all appointed by 
Pinochet, were acting as local campaign chiefs. A voter- registration 
drive had begun in early 1987, with Pinochet himself the first to 
register. While opposition forces were denied access to the mass 
media, state television aired glowing advertisements for the govern- 
ment's accomplishments. The regime stepped up production of 
low-income housing, and Pinochet presided over countless ribbon- 
cutting ceremonies. The general's wife, Lucia Hiriart, who headed 
a vast network of women's aid and mothers' clubs, organized them 
into a grass-roots support network for the yes vote. 

The turning point for the opposition had come in 1987, when 
key leaders concluded that their only hope to defeat the military 
was to beat it at its own game. Opposition leaders accepted the 
reality, if not the legitimacy, of constitutional provisions they 
despised by agreeing to register their followers in the electoral rolls 
set up by the junta, legalize political parties according to the re- 
gime's own prescriptions, and prepare to participate fully in a pleb- 
iscite they viewed as undemocratic. 

By early 1988, fourteen parties had joined a loose coalition for 
the no vote. Moderate Socialists played a key role in convincing 
dubious Chilean leftists to register to vote, and the more radical 
wing of the Socialist Party finally followed suit. With little money 
and only limited freedom to operate, an all- volunteer force led by 
Socialists and Christian Democrats registered voters, organized 
training sessions for poll watchers, and collected the signatures need- 
ed to legalize parties. By the cutoff date, a record 92 percent of 
the voting-age population had registered to vote, and four parties 
had collected enough signatures to register poll watchers for 22,000 
voting tables. 

Despite inherently unfair campaign conditions, the military 
government made some efforts to provide a level playing field. The 



210 



Government and Politics 



Constitutional Tribunal, to the annoyance of some hard-liners in 
the regime, issued a firm ruling arguing that the constitution re- 
quires the implementation of a series of measures that would 
guarantee an impartial vote and vote count. Ironically, these mea- 
sures had not been applied in the plebiscite that had ratified the 
constitution itself in 1980. Although opposition leaders did not trust 
the government, a fair election was also in the government's in- 
terest. Pinochet and his commanders were confident that the popu- 
lation's fear of a return to the confrontations of the early 1970s, 
in combination with signs of economic recovery and a campaign 
run with military efficiency, would permit Pinochet to overwhelm 
the fractious opposition and let his detractors, both at home and 
abroad, know that he enjoyed broad popular legitimacy. 

In the weeks before the plebiscite, the no campaign, finally 
granted access to television, stunned the nation with its unity and 
a series of upbeat, appealing advertisements that stressed harmony 
and joy in a reunited Chile, called for a return to democratic tradi- 
tions, and hinted at the poverty and oppression average people had 
suffered under the dictatorship. In response, the government stepped 
up its official propaganda campaign, bombarding the airwaves with 
grim and far less appealing advertisements that reminded voters 
of the violence and disorder that had preceded the coup and warned 
that Pinochet's opponents offered only more of the same. 

On October 5, 1988, the voting proceeded in a quiet, orderly 
fashion, with military guards at each polling place, per tradition. 
By 9:00 P.M., the opposition's computers had counted half a mil- 
lion votes and showed the no tally to be far ahead. However, the 
government kept delaying the release of its tallies, and state televi- 
sion finally switched to a comedy series from the United States. 

After frantic behind-the-scenes negotiations and a failed effort 
by some government officials to provoke street violence as an ex- 
cuse to cancel the plebiscite, government television announced, at 
2:40 A.M., that with 71 percent of the vote counted, the no was 
far ahead. The following night, a grim-faced Pinochet appeared 
on television and acknowledged his defeat: 54.5 percent for the no, 
versus 43 percent for the yes. Pinochet's acceptance of his elector- 
al loss was a remarkable event. Despite the general's evident am- 
bition to remain in power, the firm discipline within Chile's military 
establishment and the commitment of the other junta commanders, 
who had pledged to guarantee the vote's outcome, prevented him 
from doing so. 

The Constitutional Reforms of 1989 

The victory of the opposition led to a period of political uncertainty. 



211 



Chile: A Country Study 

The no coalition had campaigned on a platform that rejected not 
only Pinochet's candidacy but also the "itinerary" and proposed 
"institutionally" of the Pinochet government. Democratic lead- 
ers felt that their clear victory entitled them to seek significant 
modifications in the constitutional framework established by the 
armed forces. However, they firmly rejected calls for Pinochet's 
resignation, or the formation of a provisional government, as un- 
realistic. Although Pinochet and the armed forces had suffered an 
electoral defeat, they had, of course, not been defeated militarily, 
nor had they lost their iron grip on the state. Nor was there any 
hint that the military would be willing to disregard Pinochet's wishes 
and abandon the transition formula and institutional order envi- 
sioned in "their" 1980 constitution. The fact that Pinochet had 
received 43 percent of the popular vote, despite fifteen years in 
office, only strengthened his hand in military circles. 

Under these circumstances, the opposition leaders understood 
that they could not risk upsetting the military's transition formula 
or giving Pinochet an excuse to renege on the constitutional pro- 
vision calling for an open presidential election within seventeen 
months. The opposition had won the plebiscite following Pinochet's 
rules; it could not now turn around and fully disavow them. Yet 
the opposition faced a serious dilemma. The 1980 constitution would 
be very difficult to amend once a new government was elected; 
a government elected under its terms would be locked into a legal 
structure the coalition considered fundamentally undemocratic. 
Pinochet would appoint almost one- third of the Senate, and the 
congressional election would take place under the rules of a sys- 
tem designed to favor the forces of the right, which had supported 
the military government. Changes to the constitution could be ap- 
proved much more expeditiously before the full return to democracy 
because they would require the approval of only four men on the 
military junta, subject to ratification by a plebiscite. 

Moderates within the military government who were open to 
discussions with the opposition quickly distanced themselves from 
regime officials and supporters who saw any compromise as capit- 
ulation. These moderates believed that it was in the military re- 
gime's clear interest to bargain with the opposition so as to salvage 
the essential features of the institutional legacy of the armed forces. 
They wanted a "soft landing" and feared that if the regime proved 
inflexible, a groundswell of support for the opposition could sweep 
away all of what they viewed as the government's accomplishments. 

The position of the moderates in the military government, whose 
power was not assured, was bolstered significantly by the willingness 
of the largest party on the right, the National Renewal (Renovation 



212 



Government and Politics 



Nacional), to sit down with the opposition parties to come to an 
agreement on constitutional reforms. Political leaders of the 
democratic right were also uncomfortable with many of the 
authoritarian features of the 1980 constitution and anxious to dis- 
tance themselves from the more unpalatable features of the regime 
as the country began to move toward electoral politics. They too 
were committed to a spirit of dialogue that might help prevent a 
breakdown in the transition and a return to raw military rule. The 
rightists' willingness to talk to their opponents in the center and 
on the left placed the regime hard-liners on notice: if reforms were 
not accomplished before the election of a new Congress, the center- 
left parties of the opposition and the moderate right might yet find 
a way to dismantle the constitution of 1980. 

The moderates within the government won the day with two ad- 
ditional arguments. First, they argued that any compromise with 
the opposition would leave the essence of the constitution intact 
while providing it with a legitimacy it presently lacked. The con- 
stitutional reforms finally would establish the Pinochet document 
as the legitimate successor to the 1925 constitution. 

Second, the government soft-liners made persuasive arguments 
that constitutional reforms, prior to the advent of democratic poli- 
tics, could improve certain features of the constitution. The con- 
stitution was designed for Pinochet's reelection, not his defeat, and 
the armed forces feared that the document did not sufficiently pro- 
tect their institutional autonomy. By entering into a constitutional- 
reform agreement, the authorities could insist on an amendment 
that would elevate the law regulating the armed forces' internal 
operations, including promotions, organization, training, and 
finances, to the status of an "organic constitutional law." This 
would mean that changes in the law could not be made unless ap- 
proved by a majority, or four- sevenths, of all senators and deputies. 

The extraordinary bargaining among the democratic opposition, 
the moderate right, and the regime owed much to the leadership 
of Patricio Aylwin, the leader of the Christian Democrats, who had 
become the standard-bearer of the no alliance. Aylwin understood 
that the hard-liners within the military government could make 
the transition difficult, if not impossible, if the reform process broke 
down. Nor did Aylwin, who expected to be the next president of 
Chile, relish the prospect of a confrontational transitional govern- 
ment in which the new authorities would endeavor vainly to im- 
plement reforms while supporters of the former military government 
sought to hold the line. The prospects for the first government af- 
ter a long authoritarian interlude would be jeopardized by a con- 
tinuous struggle to define the future of the country's institutional 



213 



Chile: A Country Study 

order. Better to agree on the playing field now, in order to avoid 
fatal problems later. For the regime, Carlos Caceres, Pinochet's 
minister of interior, played a critical role. At one point in the talks, 
he threatened to resign when the general balked at key constitu- 
tional reforms, only to find strong support for his position among 
other commanders on the junta. 

Opponents of constitutional reform on both the far left and the 
far right shared a curious symbiotic logic. Those on the left reject- 
ed reform because they envisioned a sharp break with the military 
government, which would be defeated once again in an open 
presidential election and would have to concede the failure of its 
institutional blueprint. Those on the right relished that very con- 
frontation because they saw it as forcing the military once again 
to accept its "patriotic responsibility" and save the country from 
a citizenry still not ready for democracy. 

The fifty-four reforms, approved by 85.7 percent of the voters 
on July 30, 1989, fell far short of the expectations of the opposi- 
tion but nevertheless represented significant concessions on the part 
of the authorities. From the point of view of the opposition, the 
most important modifications were to Article 8, which in its new 
form penalized parties or groups that, through their actions and 
not simply through their objectives, threatened the democratic or- 
der. Other reforms eliminated the prohibition against party mem- 
bership of labor or association leaders, required the courts to 
consider habeas corpus petitions in all circumstances, and prohibited 
exile as a sanction. The revised article also reduced the qualified 
majorities required for approval of organic constitutional laws and 
constitutional amendments in Congress; eliminated the require- 
ment that two successive Congresses vote to enact amendments; 
and increased the number of elected senators to thirty-eight, thus 
reducing the proportion of designated senators while restoring some 
oversight functions to the Senate. In addition, the amended arti- 
cle eliminated the president's power to dissolve the lower house 
of Congress and reduced some of the chief executive's power to 
declare a state of exception; changed the mandate of Cosena by 
substituting the word representar (represent) for hacer presente (make 
known), a legal construction that the opposition interpreted from 
legal precedents at the Office of the Comptroller General of the 
Republic (Oficina de la Contralona General de la Republica) as 
giving Cosena an advisory role, rather than an enforcement role; 
and increased the membership of Cosena to eight by adding another 
civilian member, the comptroller general (contralona general). The 
latter modification ensured that the military members of Cosena 
would not enjoy a four-to-three majority. 



214 



Government and Politics 



From the perspective of the Pinochet government, the most im- 
portant result of the reform process was the retention of the essen- 
tial elements of its constitutional design and its ratification by an 
overwhelming majority of the citizenry. What the military had not 
achieved in 1980, it achieved with the negotiations of 1989. The 
constitution of the armed forces had now replaced the constitution 
of 1925 as the legitimate fundamental law of the land. Although 
it had to concede some points, the military gained a significant vic- 
tory with the provision that laws dealing with the armed forces 
would be governed by an organic constitutional law. The Pinochet 
regime also succeeded in having the first elected president's term 
limited to four years with no option to run for reelection. Govern- 
ment officials were convinced that even if the opposition parties 
won the next election, they would be incapable of governing, a sit- 
uation that would open the door in four years to a new adminis- 
tration more to the military's liking. 

With the approval of the constitutional reforms, Chile's transi- 
tion became, in political sociologist Juan J. Linz's terms, a transi- 
tion pactada (a transition by agreement), rather than a transition por 
ruptura (a sharp break with the previous order). However, the op- 
position made clear that it saw the agreements as constituting only 
a first step in democratizing the constitution, and that it would seek 
further reforms of Cosena, the composition of the Constitutional 
Tribunal and the Senate, the election of local governments, the 
president's authority over the armed forces, and the powers of Con- 
gress and the courts. 

With the constitutional reforms behind them, Chileans turned 
their attention to the December 14, 1989, elections, the first 
democratic elections for president and Congress in nineteen years. 
The fourteen opposition parties formed the Coalition of Parties for 
Democracy (Concertacion de Partidos por la Democracia — CPD), 
with Aylwin as standard-bearer. His principal opponent was 
Pinochet's former minister of finance, Hernan Biichi Buc, who ran 
as an independent supported by the progovernment Independent 
Democratic Union (Union Democrata Independiente — UDI) and 
the more moderate rightist party, National Renewal, which ran 
a joint congressional coalition called Democracy and Progress 
(Democracia y Progreso). Independent businessman Francisco 
Javier Errazuriz Talavera ran as the third candidate on a populist 
platform supported by a heterogeneous group of small parties calling 
themselves Unity for Democracy (Unidad por la Democracia). 

Aylwin (1990-94) won a decisive victory, improving on the no 
vote in the plebiscite with 55.2 percent of the 7.1 million votes cast 
to Biichi's 29.4 percent and Errazuriz's 15.4 percent (see table 25, 



215 



Chile: A Country Study 



Appendix). In the congressional races, the CPD was able to beat 
the heavy odds imposed by the government's electoral formula and 
win a majority of the elected seats in both the Chamber of Deputies 
and the Senate. In the Chamber of Deputies, the CPD gained 49.3 
percent of the vote to 32.4 percent for Democracy and Progress 
and 50.5 percent of the vote versus 43 percent for its opponent in 
the Senate (see table 36, Appendix). 

Although the CPD won a majority of the contested seats in Con- 
gress, it fell short of having the numbers required to offset the desig- 
nated senators to be appointed by the Pinochet government. Passage 
of even the simplest legislation would have required negotiations 
with opposition parties or individual designated senators. The mili- 
tary regime's electoral law had ensured an overrepresentation of 
the parties of the right in relation to their voting strength, making 
it virtually impossible for the new civilian government to adopt 
constitutional reforms without the concurrence of one of the main 
opposition groups. 

Not the least of the new government's challenges was Pinochet 
himself, who by constitutional provision could remain as com- 
mander in chief of the army until 1997. Pinochet made it clear that 
he would continue to be a watchdog, ensuring that the new rules 
were followed and that "none of his men were touched" for their 
actions in the "war" to save Chile from communism. 

Although Chile's authoritarian legacies clearly frustrated the new 
leadership, the transition probably was facilitated in the short term 
by the veto power that the military and the right continued to en- 
joy. Had the CPD pressed for an immediate modification of 
Pinochet's institutional edifice and attempted to dismiss many of 
his supporters, the armed forces would have been far more resis- 
tant to the return of civilian rule. 

Chile's rightist parties, which remained suspicious of popular 
sovereignty and fearful that a center-left alliance with majority sup- 
port could threaten their survival, would have been much more 
likely to conspire with the military had their "guarantees" been 
undermined. These authoritarian legacies also contributed to the 
success of the transition by helping the broad coalition under Ayl- 
win's leadership achieve unity, retain it, and elaborate a common 
program of moderate policies. This moderation can be attributed 
not only to respect for a new style of politics after the traumatic 
years of authoritarian rule, but also to the new authorities' genuine 
fear of the strength of the armed forces and their rightist support- 
ers. The danger Chile now faced was that the very provisions that 
made the transition possible in the short term could make the con- 
solidation of a stable democracy more difficult in the long term. 



216 



Patricio Aylwin Azocar, 
president 1990-94 
Courtesy Presidency 
of the Republic, 
Department of 
Photography 



The State and Government Institutions in Chile 
The State and the System of Government 

Even prior to the 1970 election of Salvador Allende, the Chilean 
state was one of the most extensively structured in Latin America. 
By the end of the 1960s, direct public investment constituted over 
50 percent of all gross investment. Government expenditures ac- 
counted for 14 percent of the gross national product (GNP — see 
Glossary), and 13 percent of the economically active population 
worked in the public sector. From 1940 until 1952, the budget deficit 
of the government averaged 0.5 percent of the gross domestic product 
(GDP — see Glossary). It grew to 2.4 percent between 1940 and 1952 
and 4.3 percent between 1959 and 1964, a period largely concon- 
current with the administration of the conservative Jorge Alessandri. 

With the growth of the state went the growth of a far-flung 
bureaucracy with its own dynamic and considerable independence 
from executive power. State expansion involved the creation of an 
ever larger and more bewildering array of decentralized and semi- 
autonomous agencies, which depended only nominally on parti- 
cular ministries for control. By the mid-1960s, 40 percent of all 
public employees in Chile worked for more than fifty such agen- 
cies, charged with implementing most of the economic and social 
service responsibilities of the state. 



217 



Chile: A Country Study 



Particularly important was the Production Development Cor- 
poration (Corporacion de Fomento de la Production — Corfo), 
created in 1939 to develop Chilean industry in accord with an 
import-substitution industrialization policy. By mid-century Cor- 
fo owned shares in eighty of the country's most important enter- 
prises and held majority shares in thirty-nine of them. Utilities, 
ports, steel production, and other enterprises were developed by 
an array of state agencies. Although public ventures, these enter- 
prises were governed by their own boards and enjoyed substantial 
autonomy from ministerial and executive control. Some permit- 
ted direct representation of interest groups in a quasi-corporatist 
scheme. Such representation was most commonly enjoyed by busi- 
ness organizations, which had voting rights in agencies such as the 
Central Bank of Chile (Banco Central de Chile; hereafter, Cen- 
tral Bank — see Glossary), the State Bank of Chile (Banco del Es- 
tado de Chile; hereafter, State Bank), and Corfo. During the 
Allende years, a policy of nationalization of private industry brought 
close to 500 firms into state hands, including the country's giant 
copper companies, which had been owned by United States 
interests. 

The expansion of the state sector was in response to a develop- 
ment strategy that entrusted economic growth to public-sector 
initiative and regulation. State expansion was also fueled by a 
presidential form of government that encouraged chief executives 
to establish new programs as their historical legacy. Civil service 
laws made it difficult for incoming presidents to dismiss employees, 
a situation that led to the creation of new agencies to undertake 
new programs without dismantling old ones. In a sluggish economy, 
the state sector was also an important source of patronage. Politi- 
cal parties, particularly those that were part of the incumbent 
presidential coalition, became important employment centers for 
government agencies. 

The Chilean state, however, was also notable for its general lack 
of corruption and its fairly efficient operation. Public employees 
were keenly aware that their careers could be ruined if the power- 
ful Office of the Comptroller General caught them using funds im- 
properly. Although tax revenues often lagged, Chile enforced tax 
laws with greater success than many of its neighbors. A career in 
public service was valued, and the Chilean state counted on many 
dedicated and fairly well-educated officers from Chile's middle class- 
es. The relative efficiency and probity of the Chilean state was the 
result of a long history of competitive party politics, in which op- 
position parties and Congress kept a close watch on the conduct 
of public affairs. 



218 



Government and Politics 



By the 1960s, Chile's strategy of import-substitution industri- 
alization had run its course. The country was plagued by chronic 
inflation as contending groups sought government subsidies or wage 
readjustments that would keep them ahead of their competition. 
The scramble for favorable state action on behalf of sectoral in- 
terests was intensified by growing polarization and confrontation 
in the political sphere, as increasingly mobilized social groups sought 
larger shares of Chile's finite resources. The system came to a break- 
ing point during the Popular Unity government, when the authori- 
ties unabashedly used state agencies as a means of expanding 
political support. The Allende government swelled the rolls of 
government offices with regime partisans and made ample use of 
regulatory powers to freeze prices and increase wages, while printing 
unbacked money to cover an expanding government deficit. State 
agencies became veritable fiefdoms for the different parties, each 
trying to pursue its own agenda with little regard for a coordinat- 
ed national policy. 

Within days of toppling the Allende government, the military 
regime began a dramatic reduction in the size of Chile's public 
sector. Between 1973 and 1980, public-sector employment was 
reduced 20 percent, and by the latter year only forty-three firms 
remained in state hands. In the late 1980s, another round of privati- 
zation further reduced state control of productive enterprises. Cut- 
backs in state expenditures in other fields, including medical care 
and education, reduced deficits to the point that by the mid-1980s 
the state budget was in the black. Government surpluses reached 
3 percent of GNP by the end of the military regime. 

The civilian government of Patricio Aylwin took great pains to 
retain a smaller but more efficient state. By 1992 government sur- 
pluses had reached 5 percent of GNP; expansions in state expen- 
ditures for social services were financed by increased revenues 
generated by tax reform, rather than by deficit spending. By com- 
parison with many developed countries, Chile still retained a power- 
ful state sector, with utilities, railroads, and the giant copper mines 
that produced a significant percentage of government revenues re- 
maining under government control. At the same time, the process 
of state decentralization begun by the military government con- 
tinued, albeit under the aegis of democracy rather than dictatorship. 

Chile's system of government was patterned after that of the Unit- 
ed States, as were those of all of the Latin American countries. 
The failure of the French Revolution to produce an enduring repub- 
lican model left the representative model of Philadelphia as the only 
viable republican system of government in the early nineteenth cen- 
tury. Chile thus incorporated the principle of the separation of 



219 



Chile: A Country Study 



powers into its constitutional framework, even though the coun- 
try rejected in its constitution of 1833 the federal system pioneered 
by the United States. 

Much of Chile's political history can be described as an ongo- 
ing, occasionally violent struggle for advantage among the execu- 
tive and legislative branches of government. In the 1920s, the Office 
of the Comptroller General became a virtually coequal branch of 
government with the others because of its great oversight powers 
and its virtual autonomy. With the approval of constitutional 
amendments in 1970 and the adoption of the 1980 constitution, 
the Constitutional Tribunal, Cosena, and the Central Bank be- 
came important government organs in their own right (see The 
Autonomous Powers, this ch.). 

The Presidency 

The constitution of 1925 sought to reestablish strong presiden- 
tial rule in order to offset the dominant role assumed by the legis- 
lature after the Civil War of 1891. Elected to serve a single six-year 
term, the president was given broad authority to appoint cabinets 
without the concurrence of the legislature, whose members were 
no longer eligible to serve in executive posts. Formal executive 
authority increased significantly in succeeding years as Congress 
delegated broad administrative authority to new presidents, who 
increasingly governed by decree. Constitutional reforms enacted 
in 1947 and in 1970 further reduced congressional prerogatives. 

Although the 1925 constitution gave Chilean presidents increased 
power on paper, actual executive authority does not appear to have 
increased significantly. No president could count on gaining majori- 
ty support without the backing of a broad alliance of parties. In 
1932, 1938, 1942, and 1964, presidential candidates structured suc- 
cessful majority coalitions prior to the presidential election, promis- 
ing other parties cabinet appointments and incorporation of some 
of their programmatic objectives. In 1946, 1952, 1958, and 1970, 
because presidential candidates did not attract sufficient coalition 
support to win a majority of the votes, the election was thrown into 
Congress, which chose the winner from the two front-runners. 
Whether elected by a majority of the voters or through compromises 
with opposition parties in Congress, Chilean presidents found that 
governing often amounted to a balancing act. Only by structuring 
complex majority coalitions could the president pass legislative pro- 
grams and prevent the censure of key ministers by Congress. 

The presidential balancing act was complicated by frequent defec- 
tions from the chief executive's coalition of supporters, even by 
members of his own party, particularly in the waning months of 



220 




La Moneda Palace, seat of the executive branch, in Santiago 
Courtesy Embassy of Chile, Washington 



his constitutionally stipulated single term. One result was that the 
average cabinet often lasted less than a year (see table 37, Appen- 
dix). For example, in the government of Gabriel Gonzalez Videla 
(1946-52), who was a member of the Radical Party (Partido Rad- 
ical), the average cabinet lasted six and one-half months; Allende's 
cabinets lasted slightly less than six months. The average duration 
of ministerial appointments was six months and seven months in 
the same two governments, respectively. This pattern resulted in 
frustrated presidents and policy discontinuity that belied the for- 
mal powers of the chief executive. 

The authors of the constitution of 1980 sought to address the 
government's structural problems by creating a far stronger ex- 
ecutive. The 1980 charter increases presidential terms from six to 
eight years but retains the prohibition against immediate reelec- 
tion, and it gives broad new powers to the president at the expense 
of a weakened legislature. However, prior to the transfer of power 
in March 1994, the constitution was amended, reducing the 
presidential term back to six years. 

The constitution specifies that the president should be at least 
forty years of age, meet the constitutional requirements for citizen- 
ship, and have been born on Chilean territory. The president is 
elected by an absolute majority of the valid votes cast. The 1980 



221 



Chile: A Country Study 



constitution did away with the traditional practice of having Con- 
gress decide between the two front-runners when no candidate 
receives an absolute majority of the votes. It institutes instead a 
second-round election aimed specifically at barring political bar- 
gaining in the legislature and ensuring the election of a president 
with the backing of a majority of the population. 

In addition to specific prerogatives and duties, the constitution 
grants the president the legal right to "exercise statutory authori- 
ty in all those matters that are not of a legal nature, without 
prejudice to the power to issue other regulations, decrees, or in- 
structions which he may deem appropriate for the enforcement of 
the law" (Article 32). The president has the right to call plebi- 
scites, propose changes to the constitution, declare states of emer- 
gency and exception, and watch over the performance of the court 
system. The president names ministers and, in accord with specif- 
ic procedures, two senators, the comptroller general, the com- 
manders of the armed forces, and all judges of the Supreme Court 
and appellate courts (cortes de apelaciones) . Departing from previous 
practice, which required senatorial confirmation of diplomatic ap- 
pointments, the 1980 constitution bars the legislative branch from 
any role in the confirmation process. Finally, it increases the legis- 
lative powers of the president dramatically, making the chief ex- 
ecutive a virtual colegislator (Article 32, in concordance with Article 
60). 

Ironically, although the CPD strongly criticized the dispropor- 
tionate powers given to the president in the 1980 constitution, Presi- 
dent Aylwin moved with determination to make full use of those 
very powers. The son of a middle-class family whose father was 
a lawyer and judge and eventually president of the Supreme Court, 
Aylwin was born on November 26, 1918, in Vina del Mar. He 
studied law and had faculty appointments at the University of Chile 
and the Pontifical Catholic University of Chile. In 1945 he joined 
the National Falange (Falange Nacional), the precursor of the PDC, 
which he helped form in 1957. A former senator, Aylwin served 
seven terms as president of the PDC , a position he held when he 
was nominated as the PDC's presidential candidate. In his work 
as spokesman for the multiparty opposition coalition, he displayed 
great skills as a conciliator, gaining the confidence of parties and 
leaders on the left, who had vehemently opposed his support for 
the overthrow of the Allende government. A man of deep religious 
conviction, humble demeanor, and unimpeachable honesty, Ayl- 
win impressed friends and foes alike when he successfully negotiated 
the constitutional reforms of 1989. 



222 



Government and Politics 



As president, Aylwin surprised even his closest advisers with his 
firm leadership, particularly his willingness to stand up to Pinochet, 
who remained army commander. For instance, in a crucial meet- 
ing of Cosena, Aylwin challenged Pinochet on a matter directly 
related to the issue of presidential authority and received backing 
from the other military commanders for his position. Aylwin moved 
cautiously but firmly in dealing with the human rights abuses of 
the past, appointing a commission that officially acknowledged the 
crimes of the security forces. Subsequent legislation provided com- 
pensation for victims or their families, even if prosecution for most 
of those crimes appeared unlikely ever to take place. 

The Aylwin government also took great pains to assure domes- 
tic and foreign investors of its intention to maintain the basic fea- 
tures of the free-market economic model. The CPD was keenly 
aware that it needed to retain the confidence of the national and 
international business communities and show the world that it too 
could manage economic policy with skill and responsibility. Indeed, 
by showing that Chile could manage its economic affairs in 
democracy, the government could provide an even more favora- 
ble economic climate, one not clouded by the political confronta- 
tions and potential instability of authoritarianism. The Aylwin 
government appeared to meet this objective, as the Chilean economy 
grew at an average rate of more than 6 percent from 1990 through 
1993. 

The Aylwin government was cautious in proposing constitutional 
reforms for fear of alienating the military and the opposition par- 
ties of the right, which controlled the Senate. The key constitu- 
tional reform, enacted on November 9, 1991 , created democratically 
elected local governments by reestablishing elections for municipal 
mayors and council members. Additional reforms of the judicial 
system were also approved. Although it indicated its desire to change 
the electoral system and the nature of civil-military relations, the 
Aylwin government was unable to achieve those objectives. 

The executive branch in Chile is composed of sixteen ministries 
with portfolio and four cabinet-level agencies — the Central Bank, 
the Production Development Corporation (Corfo), the National 
Women's Service (Servicio Nacional de la Mujer — Sernam), and 
the National Energy Commission (Comision Nacional de Ener- 
gia) (see fig. 11). Ministers serve exclusively at the president's dis- 
cretion. Each ministry is required to articulate a series of firm 
objectives for each fiscal year, and the president uses these ministeri- 
al goals to judge the success of a particular department and minister. 
Every seven months, a formal evaluation (state of progress) is con- 
ducted to ascertain the progress of each ministry. The president 



223 



Chile: A Country Study 









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224 



Government and Politics 



writes a formal letter to each minister in January, evaluating the 
accomplishments or failures of the department in question. Cabi- 
net officers have significant authority over their own agencies. 

Although important in setting the overall priorities of the govern- 
ment and coordinating a uniform response to issues, cabinet meet- 
ings deal primarily with general subjects. Critical policy questions, 
however, are often addressed at the ministerial level by interminis- 
terial commissions dealing with specific substantive areas. These 
include infrastructural, development, economic, socioeconomic, and 
political issues. If there is no unanimity on a particular matter, 
the question goes to "the second floor" (the president's office) for 
final disposition. The president is kept closely apprised of all mat- 
ters under discussion at all times by the secretary general of the 
presidency, who has the primary responsibility of coordinating the 
work of ministerial commissions. Under President Aylwin, that po- 
sition was held by Edgardo Boeninger Kausel, a former rector of 
the University of Chile. Boeninger' s success resulted not from the 
power of his position, which in formal terms is unimportant, but 
from his skills as a negotiator and consensus builder and from the 
willingness of the cabinet, composed of individuals from different 
parties, to work in a collegial fashion. This style of authority might 
slow decisions, but it has the advantage of averting serious con- 
flicts and sparing the president from having to micromanage policy 
or serve as a constant referee. Aylwin 's secretary general of the 
government, Enrique Correa Rios, the government's chief spokes- 
man, also played a prominent role in projecting the government's 
image and serving as a bridge to political parties and opposition 
leaders. 

In addition to the office of the secretary general of the presidency 
and secondary general of the government, two ministries had key 
roles in the Aylwin administration. The Ministry of Finance had 
virtual autonomy in formulating and guiding overall economic and 
budgetary policy. The Ministry of Interior, the principal "politi- 
cal ministry" of the government, was charged with law enforce- 
ment and with coordinating government policy with the parties of 
the CPD. 

The Legislative Branch 

Inaugurated on July 4, 1811, the National Congress became one 
of the strongest legislative bodies in the world by the end of the 
nineteenth century. The 1925 constitution reaffirmed the commit- 
ment to a bicameral system made up of a 150-member Chamber 
of Deputies and a fifty-member Senate. However, that charter 
diminished congressional prerogatives by barring members of 



225 



Chile: A Country Study 



Congress from occupying ministerial posts, restricting the legisla- 
ture's power over budget laws, and giving the president consider- 
able legislative powers, including the right to designate particular 
legislation as "urgent." Nevertheless, Congress remained a criti- 
cal arena for the formulation of national policy, serving as the most 
important institution for cross-party bargaining and consensus 
building in Chile's fragmented political system. Congress produced 
fundamental legislation, such as laws establishing social security 
(1924), the Labor Code (1931), the minimum wage (1943), Corfo 
(1939), restrictions on the PCCh (1948), and agrarian reform 
(1967). Congress also had an important means of oversight in its 
authority to accuse ministers of wrongdoing. 

Under the 1980 constitution, Chile retains a bicameral legisla- 
ture composed of the Chamber of Deputies and the Senate, both 
of which play a role in the legislative process. However, the 1980 
charter reduced the Chamber of Deputies to 120 members, two 
for each of sixty congressional districts. All deputies serve for four 
years on the same quadrennial cycle. Upon taking office, all deputies 
must be citizens possessing the right to vote. They must be at least 
twenty-one years old, must have completed secondary education, 
and must have lived in the district they represent for at least two 
years. The 1980 constitution also reduced the Senate, to thirty- 
eight elected members, who serve eight-year terms, with half of 
the body coming up for election every four years, plus nine desig- 
nated senators. Senators must be citizens with the right to vote, 
must be at least forty years old, must have completed secondary 
school, and must have lived in the region they represent for at least 
three years. High-level government officials, including ministers, 
judges, and the five members of the Central Bank Council, are 
barred from being I candidates for deputy or senator until a year 
after they leave their posts. Leaders of community groups or other 
associations also are not permitted to become candidates unless they 
give up their posts. 

In addition to the elected senators, the Senate has nine desig- 
nated senators (eight since the death of one in 1991), all of whom 
serve eight-year terms. The Supreme Court names two from the 
ranks of former members of the court and one who has served as 
comptroller general. Cosena designates four senators, each a former 
commander of each of the armed services who held that post for at 
least two years. Finally, the president of the republic designates 
two senators, one who has been a university president and the other 
a government minister (Article 45). All former presidents who re- 
main in office for at least six years of the eight-year term are 
automatically senators for life. Pinochet, the only former president 



226 



Government and Politics 



alive when the current Senate was installed in March 1990, opted 
instead to remain commander in chief of the army, a post that is 
constitutionally excluded from a senatorial position. The appointed 
senators played a somewhat surprising role in the Aylwin govern- 
ment by not always acting in unity with the rightist opposition, 
as the government feared they would. Indeed, these senators 
occasionally served as bridges between the government and the 
armed forces, helping to diffuse tensions and avert misunder- 
standings. 

The Chamber of Deputies carries out its duties by means of thir- 
teen permanent commissions, each one of which is composed of 
thirteen deputies. The Senate has eighteen commissions, each with 
five members. Most of the commissions correspond to a ministry 
responsible for a similar substantive area. Mixed commissions, com- 
posed of members from both houses, are charged with resolving 
discrepancies between the houses on particular pieces of legislation. 

The constitution establishes a hierarchy of laws that must be 
approved by majorities of various sizes. Ordinary laws are approved 
by a simple majority of the members present in both chambers. 
Laws requiring a qualified quorum must be approved by an abso- 
lute majority of all legislators. An example would be a law redefining 
the boundaries of regions or provinces (see table 38, Appendix). 
Organic constitutional laws, designed to complement the consti- 
tution on key matters, require approval by four-sevenths of all mem- 
bers to be modified, repealed, or enacted into law. Finally, laws 
interpreting the constitution require the approval of three-fifths of 
all legislators for enactment. 

Constitutional amendments can be initiated by the president, 
ten deputies, or five senators, and they require the concurrence 
of three-fifths of all legislators and the signature of the president 
to be approved. Key provisions dealing with such matters as rights 
and obligations, the Constitutional Tribunal, the armed forces, and 
Cosena require the assent of two-thirds of the members of each 
chamber and approval by the president. If the president rejects a 
constitutional reform measure that is subsequently reaffirmed by 
Congress by at least a three-fifths vote, he or she can take the mat- 
ter to the voters in a plebiscite. 

Congress has the exclusive right to approve or reject interna- 
tional treaties presented to it by the president before ratification, 
following the same procedure used in approving an ordinary law. 
Although the president, with the consent of Cosena, can institute 
a state of siege (see state of exception, Glossary), Congress, within 
a period of ten days, can approve or reject the state of siege by 
a majority vote of its members. 



227 



Chile: A Country Study 

In case the office of the president is left vacant and there are 
fewer than two years left in the presidential term, Congress can 
select a presidential successor through a majority vote of its mem- 
bers. Should the vacancy occur with more than two years left in 
the presidential term, a new presidential election would be called. 
The Chamber of Deputies can also initiate a constitutional accu- 
sation by majority vote against the president, ministers, judges, 
the comptroller general, admirals, generals, intendants of regions, 
and governors of provinces for violations of the; law, constitution- 
al dispositions, or abuse of power. The Senate, in turn, acts as a 
jury and finds the accused either innocent or guilty as charged. 
If the president of the republic is accused, the conviction depends 
on a two-thirds majority in the Senate. The Senate is also required 
to give the president permission to leave the country for a period 
of more than thirty days or for any amount of time during the last 
ninety days of the presidential term. Further, the Senate can declare 
the physical or mental incapacity of the president or president-elect, 
once the Constitutional Tribunal has pronounced itself on the 
matter. 

The original constitutional provisions of 1980 virtually barred 
the Senate from exercising oversight of the executive branch or ex- 
pressing opinions on the conduct of government. These provisions 
were removed from the constitution in the 1989 amendments. The 
amendments also eliminate the president's power to dissolve the 
Chamber of Deputies. The constitution of 1980, however, severe- 
ly limits the role of Congress in legislative matters relative to earlier 
legislatures in Chilean history. Article 62 states that "the Presi- 
dent of the Republic holds the exclusive initiative for proposals of 
law related to changes of the political or administrative division 
of the country, or to the financial or budgetary administration of 
the State." Article 64 of the constitution also restricts the bud- 
getary prerogatives of the legislative branch. 

In several areas, the president is given sole authority to introduce 
bills. These include measures involving spending, changes in the 
duties and characteristics of public-sector administrative entities, 
modifications to the political-administrative configuration of the 
state, and initiatives related to collective bargaining. The presi- 
dent can also call the legislature into extraordinary session, at which 
time the legislature can only consider legislative and treaty proposals 
introduced by the president. The president may grant certain in- 
itiatives priority status, requiring that Congress act within three, 
ten, or thirty days, depending on the degree of urgency specified. 
In this sense, the president has the exclusive power to set the legis- 
lative agenda and, therefore, the political agenda. In a further 



228 



The Chamber of Deputies in the new parliament building in Valparaiso 
The National Congress building in Valparaiso 
Courtesy Embassy of Chile, Washington 



229 



Chile: A Country Study 



restraint on legislators, the 1980 constitution permits the Constitu- 
tional Tribunal to remove a senator or deputy from office if he or 
she "permits the voting of a motion that is declared openly con- 
trary to the political constitution of the State by the Constitutional 
Tribunal" (Article 5,7). 

Finally, Congress is limited in its ability to act as a counterforce 
against the president's power in matters dealing with the constitu- 
tional rights of citizens. Although the president needs the approval 
of the majority of Congress to establish a state of siege, the presi- 
dent may declare a state of assembly, emergency, or catastrophe 
solely with the approval of Cosena (Article 40). 

Important legislative initiatives approved during the Aylwin 
government have included, in the political sphere, constitutional 
changes leading to the creation of democratic local governments; 
laws reforming the administration of justice, including the treat- 
ment of political prisoners and terrorism; and the creation, in 1990, 
of a cabinet-level agency, Sernam, to pay special attention to wom- 
en's issues. In the sociocultural area, changes included a revision 
to the National Education Law to "dignify" the teaching profes- 
sion and establish a "teaching career' ' ; a reformulation of student 
loan programs; and measures designed to simplify the reporting 
of petty crimes and robbery and increase the powers of the police 
in dealing with such crimes. Congress also approved measures to 
regulate collective bargaining and recognize labor organizations. 
In the economic sphere, the most important legislation enacted into 
law included the Industrial Patents Law, designed to ease Chile's 
entrance into international markets; the lowering of tariff barri- 
ers; and the creation of a price-stabilization fund for petroleum. 
In the international sphere, Congress approved various treaties of 
economic cooperation (including one with the European Econom- 
ic Community) and ratified the findings of the Bryan Commission, 
a joint commission with the United States that settled the case of 
the 1977 assassination of Chilean ambassador Orlando Letelier in 
Washington, which had constituted a long-time source of conflict 
between Chile and the United States. 

During the Aylwin administration, relations between the execu- 
tive and Congress were conducted through an informal network 
of bilateral commissions composed of ministers and their top ad- 
visers and senators and deputies of the governing coalition work- 
ing in the same policy area. However, these meetings proved less 
important than the weekly gatherings presided over by the minister 
of interior with party leaders of the CPD coalition, leaders of the 
CPD parties in the legislature, and the secretaries general of the 
presidency and the government. At these weekly meetings, the 



230 



Government and Politics 



legislative agenda was discussed and decided upon. This pattern 
of decision making signified, in practice, that individual members 
of Congress and the legislature itself had assumed a secondary and 
pro forma role, following the instructions of legislative leaders in 
their close negotiations with government and party leaders. Nor 
did congressional committees or members of Congress have enough 
staff and expertise to deal with experts from the executive branch 
on complex legislative matters. Individual legislators could articu- 
late concerns and provide important feedback, but early in the 
postauthoritarian period the legislature appeared to be playing a 
decidedly secondary role. 

The Courts 

Although the Republic of Chile's founders drew on the exam- 
ple of the United States in designing the institutions of government, 
they drew on Roman law and Spanish and French traditions, par- 
ticularly the Napoleonic Code, in designing the country's judicial 
system. The judicial system soon acquired a reputation for indepen- 
dence, impartiality, and probity. However, the judiciary fell into 
some disrepute during the Parliamentary Republic (1891-1925), 
when it became part of the logrolling and patronage politics of the 
era. 

The 1925 constitution introduced reforms aimed at depoliticiz- 
ing and improving the judicial system by guaranteeing judicial in- 
dependence. Chile's justice system established itself as one of the 
best on the South American continent, despite a serious lack of 
resources and inadequate attention to the needs of the nation's 
poorest citizens. 

During the Popular Unity government, the Supreme Court 
repeatedly clashed with the president and his associates. The Al- 
lende government viewed the court as a conservative and inflexi- 
ble power, obsessed with a literal definition of a law designed to 
protect the privileges of private property against the new logic of 
a revolutionary time. The Supreme Court retorted vehemently that 
its task was simply to follow the dictates of the law, not to change 
it to suit some other objective. 

The courts had much less difficulty dealing with the military re- 
gime, which left the court system virtually intact. As soon as the 
courts accepted the legitimacy of the military junta as the new ex- 
ecutive and legislative power, they worked diligently to adjudicate 
matters in conformity with the new decree laws, even when the 
latter violated the spirit and letter of the constitution. In particu- 
lar, the courts did nothing to address the serious issue of human 
rights violations, continuously deferring to the military and security 



231 



Chile: A Country Study 



services. The Supreme Court saw its own jurisdiction severely erod- 
ed as the military justice system expanded to encompass a wide 
range of national security matters that went far beyond institutional 
concerns. 

According to the 1925 constitution, modified somewhat by the 
1980 document, the Supreme Court can declare a particular law, 
decree law, or international treaty "inapplicable because of un- 
constitutionality." This does not invalidate the statute or mea- 
sure for all cases, only for the one under consideration. Another 
important function of the Supreme Court is the administration of 
the court system. The organization and jurisdiction of Chile's courts 
were established in the Organic Code of the Tribunals (Law 7,241) 
adopted in 1943. This law was modified on several occasions; two 
recent instances are the organic constitutional Law 18,969 of March 
10, 1990, and Law 19,124 of February 2, 1992. Chile's ordinary 
courts consist of the Supreme Court, the appellate courts (cortes de 
apelacion), major claims courts, and various local courts (juzgados 
de letras). There is also a series of special courts, such as the juvenile 
courts, labor courts, and military courts in time of peace. The lo- 
cal courts consist of one or more tribunals specifically assigned to 
each of the country's communes, Chile's smallest administrative 
units. In larger jurisdictions, the local courts may specialize in crimi- 
nal cases or civil cases, as defined by law. 

Chile has sixteen appellate courts, each with jurisdiction over 
one or more provinces. The majority of the courts have four mem- 
bers, although the two largest courts have thirteen members, and 
Santiago's appellate court has twenty-five. The Supreme Court 
consists of seventeen members, who select a president from their 
number for a three-year term. The Supreme Court carries out its 
functions with separate chambers consisting of at least five judges 
each, presided over by the most senior member or the president 
of the court. 

Members and prosecutors of the Supreme Court are appointed 
by the president of the republic, who selects them from a slate of 
five persons proposed by the court itself. At least two must be senior 
judges on an appellate court. The others can include candidates 
from outside the judicial system. The justices and prosecutors of 
each appellate court are also appointed by the president from a 
slate of three candidates submitted by the Supreme Court, only 
one of whom can be from outside the judicial system. In order to 
be appointed, ordinary judges at the local level are appointed by 
the president from a slate of three persons submitted by an appel- 
late court. They must be lawyers, must be at least twenty-five years 
old, and must have judicial experience. Ministers of the appellate 



232 



Government and Politics 



courts must be at least thirty-two years old, and Supreme Court 
ministers must be at least thirty-six years old, with a specified num- 
ber of years of judicial or legal experience. Judges serve for life 
and cannot be removed except for inappropriate behavior. 

The relationship between the Aylwin administration and the 
Supreme Court was tense. Pinochet offered extraordinary retire- 
ment bonuses to the eldest court members to ensure the appoint- 
ment of relatively young judges who were friends of the outgoing 
regime. The parties of the CPD were highly critical of these ap- 
pointments and made no secret of their strong disapproval of the 
Supreme Court's behavior under the military government, particu- 
larly its complete disregard for the massive violations of human 
rights. Responding to these concerns, the Aylwin administration 
introduced constitutional reform legislation that would overhaul 
the nomination procedure for Supreme Court ministers, create a 
separate administrative structure for the judicial branch, and ob- 
ligate the Supreme Court to take a more vigilant role in the pro- 
tection of human rights. These reform efforts failed because the 
parties of the right refused to go along with change in the face of 
strong opposition from the Supreme Court, which was fearful that 
it would lose its prerogatives and concerned that the judicial sys- 
tem would become "politicized." Still pending as Aylwin's term 
neared its end were reforms of the military justice system with its 
authority to try civilians in areas of national security and to judge 
military personnel even when charged with a criminal or civil crime 
against civilians. 

The Autonomous Powers 

The Comptroller General 

The Office of the Comptroller General of the Republic has been 
a highly visible institution since the adoption of the 1925 constitu- 
tion. In 1943 it was upgraded to an autonomous government or- 
gan through an amendment to the constitution (Law 7,727) and 
was retained as such in the constitution of 1980. Charged with serv- 
ing as the government's auditor, the agency has a large profes- 
sional staff, which scrutinizes the collection and expenditure of 
government funds by the National Treasury, the municipalities, 
and other state services as determined by law. Over the years, the 
agency gained a reputation for insisting on strict conformity to the 
law, instilling respect in career officials and elected officials alike. 

In addition to its preaudit and postaudit functions, the Office 
of the Comptroller General has significant juridical functions, as 
it is empowered to rule on the legality and constitutionality of 



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Chile: A Country Study 



decrees and laws. All supreme decrees and resolutions are routinely 
sent to the Office of the Comptroller General for a ruling prior 
to adoption. In this sense, the comptroller general's oversight func- 
tions are essentially preventive. The chief executive can overrule 
the comptroller general's objection to a presidential decree by is- 
suing a so-called decree of insistence requiring the signature of every 
cabinet minister. Overruling the comptroller general opens the 
ministers to the threat of censorship by the Chamber of Deputies. 
In order to guarantee the comptroller general's autonomy, the offi- 
cial is appointed by the president, with the consent of the Senate, 
to serve until age seventy-five. The comptroller general has com- 
plete control over the organization and staff of the office in confor- 
mity with Law 10,336 (Law of Organization and Powers of the 
Comptroller General of the Republic). 

The Constitutional Tribunal 

Although the comptroller general serves as an effective watch- 
dog over government officials and functionaries, definitive and 
binding decisions on constitutional matters are made by the Con- 
stitutional Tribunal. The tribunal was created by the constitutional 
reforms of 1970 (Law 17,284) to provide the country with a body 
that would serve as final arbiter on constitutional matters and thus 
prevent the adoption of unconstitutional laws or decrees. Like other 
"neutral" institutions, such as the military and the courts, the 
tribunal was highly politicized by the crisis of the Allende years. 
It was unable to serve as an effective arbiter as the institutional 
conflict — between the government and its opposition and between 
the presidency and Congress — as well as the political conflict es- 
calated beyond the point of no return. 

Under the 1980 constitution, the Constitutional Tribunal con- 
sists of seven members appointed on a staggered basis to eight-year 
terms. The Supreme Court selects three, Cosena two, and the presi- 
dent and Senate one each. The tribunal possesses broad powers to 
judge the constitutionality of laws at all points in the legislative 
process. It can also declare unconstitutional any decrees issued by 
the president of the republic and rule on the constitutionality of a 
plebiscite. The tribunal resolves disputes among government mini- 
sters, legislators, and the executive and can rule on complaints 
presented by the president or members of either of the legislative 
chambers, provided that at least one-fourth of the members agree 
to register a formal grievance. The tribunal also rules on constitu- 
tional challenges to the legality of political parties (Article 19). 

The Constitutional Tribunal is the court of last resort on con- 
stitutional matters. Article 83 of the constitution provides that "no 



234 



Government and Politics 



appeal whatsoever shall apply against the decisions of the Constitu- 
tional Tribunal." The article adds that "once the court has decided 
that a specific legal precept is constitutional, the Supreme Court 
may not declare it inapplicable on the same grounds on which the 
decision was based." 

The parties represented in the Aylwin coalition were not com- 
fortable with the tribunal's broad jurisdiction. In their view, the 
tribunal's far-reaching powers to determine the constitutionality 
of laws, presidential decrees, and other government decisions made 
it a highly undemocratic body, particularly given that its mem- 
bers are appointed almost entirely by nonelected bodies. The Ayl- 
win government favored constitutional reforms that would give the 
president and Congress the right to appoint a substantial majority 
of the tribunal members. The government also sought to limit the 
tribunal's power to decide the constitutionality of laws approved 
by Congress and signed by the president. 

Reforms seemed unlikely in the immediate future because the 
parties of the right argued that a tribunal designed to protect the 
supremacy of the constitution would be undermined, should it be 
constituted by those very bodies that would be scrutinized. In ad- 
dition, those accepting the status of the tribunal pointed to the posi- 
tive role it played in settling the dispute over the status of 
independent candidates in the 1992 municipal elections. They con- 
tended that the tribunal's role in settling the dispute helped avert 
a major political dispute that might have delayed the elections. 

The Central Bank of Chile 

The Central Bank of Chile, like the Office of the Comptroller 
General, was created in 1925 on the recommendation of the finan- 
cial mission to Chile headed by United States banking official 
Edwin Walter Kemmerer. The Central Bank was charged with 
printing money and controlling its circulation. Its authority over 
the country's monetary policy increased gradually over the years. 
The 1980 constitution elevates the Central Bank to constitutional 
status as an ' 'autonomous" state organ to be governed by an or- 
ganic constitutional law (Law 18,840). The military government 
was concerned that the Central Bank be insulated from political 
pressures to ensure that sound monetary policies were followed. 
The regime was reacting in part to the common practice of earlier 
years, particularly under the Popular Unity government, when pub- 
lic expenditures were financed with direct and indirect loans from 
the Central Bank, fueling budget deficits and inflation. 

The Central Bank is governed by the five-member Central Bank 
Council appointed by the president, with the consent of the Senate, 



235 



Chile: A Country Study 

on a staggered basis. Each member serves ten years and can be 
reappointed. The president of the Central Bank is selected from 
among the council members to serve for five years. 

The Electoral Certification Tribunal 

Until the adoption of the 1925 constitution, the fairness of the 
electoral process was determined by Congress itself. Because of 
widespread abuses engendered by the system, the constitutional 
reformers of the time created the Electoral Certification Tribunal 
(Tribunal de Certificacion Electoral — TCE), drawn by lots from 
a group of distinguished public figures, primarily jurists, who would 
evaluate the integrity of the electoral process and rule on particu- 
lar challenges. The 1980 constitution preserves the TCE, specify- 
ing that its members include three ministers or former ministers 
of the Supreme Court chosen by the Supreme Court through a 
secret ballot, a lawyer also elected by the Supreme Court, and a 
former president of the Senate or Chamber of Deputies who has 
held that post for no fewer than three years. The TCE's duties and 
responsibilities are defined by an organic constitutional law (Law 
18,460). 

The Armed Forces 

The armed forces constitute an essentially autonomous power 
within the Chilean state. An entire chapter of the constitution 
(Chapter 10) is devoted specifically to the armed forces, granting 
them a status comparable to that of Congress and the courts. 
Although the opposition felt that it had reduced the tutelary role 
of the armed forces with the constitutional reforms of 1989 by soften- 
ing the language dealing with Cosena's powers, the military con- 
tinued to have a constitutionally sanctioned right to discuss politics 
and policy and make its views known to the democratically elected 
authorities. 

Whether or not the commanders of the services "represent" their 
views "or make them known," the political fact remains that the 
armed forces are defined by the constitution as the "guarantors 
of the institutional order of the Republic." Thus, their leadership 
exercises tutelage over the conduct of the elected government and 
other state bodies. This privilege is given only to the commanding 
officers. The 1980 constitution lays down strict rules requiring 
lower-ranking officers to refrain from any political activity or ex- 
pression and to conform strictly to the orders of their superiors. 

The 1989 reforms did not change the provisions that insulate 
the commanders in chief of the armed services and the Carabi- 
neros from democratically elected leaders. Although the military 



236 



Government and Politics 



commanders and the head of the Carabineros are chosen by the 
president from among those officers having the most seniority in 
their respective services, the appointment is for four years, during 
which time the commanders cannot be removed except by Cosena 
under exceptional circumstances. 

The constitution also specifies that entry into the armed ser- 
vices can only be through the established military academies and 
schools that are governed exclusively by the services, without out- 
side interference. The Organic Constitutional Law on the Armed 
Forces (Law 18,948 of February 1990) governs in detail military 
education, hierarchy, promotion, health, welfare, and retirement. 
It also provides the armed forces with a specific minimum budget 
that cannot be reduced. Other legislation provides the military with 
a set percentage from the worldwide sales of the state-run copper 
companies. 

Despite seventeen years of military rule, the armed forces in 1994 
were remarkably uncontaminated by factionalism or partisan poli- 
tics. No major divisions within the services are apparent. However, 
because the military enjoyed privileged treatment during Pinochet's 
rule, any attempt to tamper with military prerogatives is likely to 
be strongly resisted. 

Pinochet's insistence on retaining his position as commander in 
chief of the army displeased the Aylwin government. As commander 
of the army, the general affirmed the military's determination to 
resist prosecution for human rights violations. Yet the army's credi- 
bility was badly damaged by allegations of financial wrongdoing 
by Pinochet's son, the discovery of mass graves containing corpses 
of individuals who died while in military hands, and the illegal ex- 
port of arms to Croatia. The report of the National Commission 
on Truth and Reconciliation, known as the Rettig Commission, 
confirmed many of the allegations of military abuses. 

The Aylwin government contended that the full consolidation 
of democracy could not be accomplished without a fundamental 
change in the relationship between civil and military authority. 
Members of the CPD asserted that presidential control of the armed 
forces existed in all modern democracies and since 1822 had been 
an essential element in Chile's constitutional tradition. 

A proposal for reform of the Organic Constitutional Law on the 
Armed Forces was signed by President Aylwin on March 29, 1992, 
and sent to Congress. Aylwin 's initiative dealt specifically with Ar- 
ticle 7 and Article 53 of the organic laws of the armed forces and 
police, which limit presidential prerogatives in relation to the hir- 
ing, firing, and promotion of members of the military. Among the 
suggested reforms was a provision providing the president with the 



237 



Chile: A Country Study 



right to choose commanders of the armed forces from among the 
ten most senior officers, instead of the top five. These proposals 
were opposed, however, by both parties of the right, making it im- 
possible to envision any constitutional reform on this matter in the 
foreseeable future. 

The opposition contended that the tenure of the commanders 
had contributed to the stability and moderation of the Chilean tran- 
sition. It argued that these reforms would result in the politiciza- 
tion of the armed forces by undermining the hierarchy, discipline, 
and professionalism of military institutions. The rightist parties also 
contended that the reform proposals, if successful, would upset the 
counterweights on presidential power and would disturb the in- 
stitutional balance existing among the president, the Constitutional 
Tribunal, Congress, and Cosena. This balance, they argued, helped 
guarantee the success of the Chilean transition by insulating the 
armed forces from overt political pressures (see Civil-Military Re- 
lations, ch. 5). 

Regional and Local Government 

With the adoption of the constitution of 1833, Chile abandoned 
earlier attempts to create a federal system and opted for a unitary 
form of government. As such, regional and local governments be- 
came creatures of national authority, subject to the legislative and 
constitutional powers vested in the central government. This did 
not mean that local governments did not enjoy varying degrees 
of self-determination and autonomy over the years. The 1833 docu- 
ment provided for the election of local municipal councils through 
direct popular vote, a practice retained by the constitution of 1925. 
During much of the nineteenth century, local governments were 
barely able to provide the minimal services they were charged with, 
such as the maintenance of public order and basic sanitation, given 
the scarcity of resources. In 1891, however, the country embarked 
on a bold experiment, providing significant local autonomy to the 
nation's elected municipalities, many of which flourished under 
local leadership with local resources. The center of gravity of Chilean 
politics shifted toward local governments and their allies in 
Congress. 

Partly in reaction to the corrupt machine politics of the city bosses, 
the 1925 constitution sought greater oversight of local authorities 
by expanding the democratic process through the creation of elected 
provincial assemblies. However, enabling legislation that would 
have made those assemblies a reality was never adopted. Instead, 
the oversight functions were turned over to appointed agents of 
the central government. During the dramatic expansion of the 



238 



Government and Politics 



national state in the wake of the Great Depression, local govern- 
ments were left behind. Tax revenues, which by law were supposed 
to be returned to local governments, were routinely kept by the 
authorities of the central government. The essence of local politics 
became a struggle to use party and patronage networks to extract 
resources on a preferential basis for local development. As the na- 
tion's electorate expanded, local government officials played an in- 
creasingly important role as electoral agents. Mayors and councilors 
became political brokers seeking to exchange votes for a water treat- 
ment plant, a stretch of highway, or jobs for constituents. Elec- 
tions for local office were as hotly contested as elections for national 
office and served as building blocks of party development. 

The military regime viewed the somewhat fractious state of lo- 
cal politics as proof that parties and politicians were incapable of 
efficient administration. As a result, it designed a system of local 
administration distinctly based on corporatism (see Glossary) and 
heavily dependent on direct appointments from the center. Accord- 
ing to the constitution of 1980, regional and local governments 
would be administered by intendants and mayors, respectively. 
These figures would be appointed directly by the president of the 
republic, although the mayors of smaller towns would be desig- 
nated by regional councils created to advise the intendants. The 
regional councils would be formed by employees of state agencies 
in the locality, by military officers, and by designated representa- 
tives of interest groups with no party affiliation. This conception 
of regional government would be extended to the municipal level 
with similarly designated local councils. 

Although this scheme would make local authorities highly depen- 
dent on appointments from above, the military government also 
took an important step to decentralize state functions by giving local 
administrative units greatly increased resources and autonomy to 
make local governments viable. A notable example was the deci- 
sion to give municipal governments far more responsibility for 
elementary and secondary education and other local services. 

The Aylwin government made the restoration of democracy at the 
grass-roots level a matter of high priority. Many opposition leaders 
on the right shared the view that the military regime had gone too 
far in eradicating the country's long tradition of elected local govern- 
ments. After considerable debate, the government and National 
Renewal were able to reach consensus on a constitutional reform 
law, adopted in November 1991, to change Chapter 13 of the con- 
stitution dealing with local administration (Law 19,097). 

The constitutional reform was followed by the adoption of a new 
Organic Constitutional Law on Municipalities (Law 19,130 of 



239 



Chile: A Country Study 



March 19, 1992), which paved the way for municipal elections in 
June 1992. Under the law, local governments are formed by a 
municipal council and a mayor who serve four-year terms and are 
elected through a proportional representation system. Candidates 
must be sponsored by registered political parties that obtained at 
least 5 percent of the vote in previous contests. The number of coun- 
cilors varies, from six in smaller municipalities to ten in the larger 
ones. The law establishes that the councilor who receives the most 
votes on the party list that receives the largest number of votes is 
elected mayor, provided that he or she obtains at least 35 percent 
of the total vote. If this requirement is not met, the mayor is elected 
by the municipal council from among its own number by an abso- 
lute majority of the vote. The Organic Constitutional Law on 
Municipalities requires that the mayor and councilors be citizens 
in good standing, reside in the region where they are running for 
office, and be literate. It bars government officials and members 
of Congress from running for local office. It is the mayor's respon- 
sibility to propose a communal plan, a budget, investment pro- 
grams, and zoning plans to the municipal council for approval. 
The mayor also appoints delegates to remote areas of the commu- 
nity. The municipal council approves local ordinances and regu- 
lations and oversees the work of the mayor, being authorized to 
call to the attention of the comptroller general any irregularities. 

Municipalities have sole responsibility for traffic regulation, urban 
planning and zoning, garbage collection, and beautification. 
Municipal governments work closely with state agencies on a host 
of other matters, ranging from public health to tourism, recrea- 
tion, and education, and are authorized to create administrative 
units to oversee each of these activities. Most of the municipal 
resources come from the Common Municipal Fund, administered 
by the Ministry of Interior, which endeavors to favor poorer areas 
in the distribution of resources for local government. The law on 
municipalities also calls for the creation of an economic and social 
council in each municipality. This is an advisory body constituted 
by representatives of local organized groups, including neighbor- 
hood associations and functional organizations, such as parent- 
teacher associations and mothers' groups. 

On June 23, 1992, 6.4 million Chileans (90 percent of the na- 
tion's registered voters) participated in Chile's first municipal elec- 
tions since 1971 . As was done in the congressional elections of 1989, 
joint lists designed to maximize electoral fortunes were formed by 
both the progovernment and the antigovernment parties. The results 
of the municipal contests did not deviate substantially from those 
observed in the earlier race. The CPD obtained 60.6 percent 



240 



Government and Politics 



of the vote, to the right's 30 percent (38 percent if the indepen- 
dent Union of the Centrist Center [Union de Centro Centro — 
UCC] is counted with the right) (see table 39, Appendix). 

Nationwide elections for the country's thirteen regional coun- 
cils were held in April 1993. The CPD won the majority of the 
thirteen regions. Of the total of 244 regional council members elect- 
ed nationwide, 134 were CPD candidates and eighty-six were can- 
didates of the opposition parties of the right. Another thirteen seats 
went to independent candidates or those from other parties. A tie 
resulted only in the sparsely populated Aisen del General Carlos 
Ibanez del Campo Region in the far south, where the government 
and the opposition each won eight council seats. 

Parties and the Electoral System 
The Party System 

In the early 1990s, Chile had a strong, ideologically based multi- 
party system, with a clear division among parties of the right, center, 
and left. Chile's parties traditionally have been national in scope, 
penetrating into remote regions of the country and structuring poli- 
tics in small villages and provincial capitals. Party affiliation has 
served as the organizing concept in leadership contests in universi- 
ties and private associations, including labor unions and professional 
associations. Political tendencies are passed from generation to gen- 
eration and constitute an important part of an individual's identity. 

By the middle of the twentieth century, each of Chile's political 
tendencies represented roughly one-third of the electorate. The left 
was dominated by the Socialist Party (Partido Socialista) and the 
Communist Party of Chile (Partido Comunista de Chile — PCCh), 
the right by the Liberal Party (Partido Liberal) and the Conserva- 
tive Party (Partido Conservador), and the center by the anticleri- 
cal Radical Party (Partido Radical), which was replaced as Chile's 
dominant party by the Christian Democratic Party (Partido 
Democrata Cristiano — PDC) in the 1960s. 

Although ideological polarization characterized party politics until 
the 1960s, political coalitions across party lines helped to mitigate 
conflict. Party politics dominated both the national arena, where 
ideological objectives predominated, and the local arena, which fo- 
cused on more clientelistic concerns. The interplay between these 
two levels helped moderate interparty conflict. Polarization in- 
creased markedly, however, in the wake of the 1959 Cuban Revo- 
lution as parties radicalized their programs, seeking to achieve 
hegemony over their rivals in an increasingly desperate attempt 
to control Chile's future. 



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Chile: A Country Study 

The military authorities believed that their policies would fun- 
damentally change the traditional party system. Repression, legal 
restrictions, and new legislation governing parties and elections, 
combined with profound underlying changes in the nation's so- 
cial structure, would render the old parties obsolete. Although the 
authorities conceded by 1985, in the aftermath of national protests, 
that they had not destroyed the party system, they remained in- 
tent on designing rules that would change its basic physiognomy. 
In March 1987, the Law of Political Parties was adopted, which 
provided for stringent requirements that officials of the military 
government believed the old parties could not meet. The law re- 
quires each legal party to obtain signatures equivalent to 5 per- 
cent of the electorate in at least eight regions, or in at least three 
contiguous regions. It also places restrictions on party activities and 
regulates party financing, internal organization, and selection of 
leaders, specifying that top party leaders be chosen democratically 
by rank-and-file members. 

However, Chile's parties were able to adjust well to the law. In- 
deed, the requirement for a large number of signatures gave party 
leaders a strong incentive to mobilize grass-roots support and 
strengthen local party organizations. The selection of party leader- 
ship through democratic means helped legitimize the leaders who 
fought the military government, leaders whom the authorities had 
often characterized as unrepresentative. 

The Electoral System 

The far-reaching electoral reforms implemented before the 1989 
elections represented a further attempt to transform Chile's party 
structure into a moderate two-party system. The constitution of 
1925 had established a system of proportional representation to al- 
locate seats in multimember districts, the most widely used sys- 
tem in Latin America and Europe. For the elections to the Chamber 
of Deputies, the country was divided into twenty-eights districts, 
each electing between one and eighteen deputies for a total of 150, 
producing an average district delegation of 5.4 deputies. Although 
implementation of the proportional representation system was not 
responsible for the emergence of the country's multiparty system, 
it encouraged party fragmentation, particularly before 1960, when 
parties were allowed to form pacts with each other in constituting 
individual lists. 

Women were granted the vote for municipal elections in 1934 
and for national elections in 1949. Chile has a lively history of wom- 
en's civic and political organizations that goes back to the early 
decades of the twentieth century, including the formation of two 



242 



Government and Politics 



political parties led by women, one of which, the Feminine Civic 
Party (Partido Cfvico Femenino), elected its main leader to the 
Senate before it faded from the scene in the mid-1950s. However, 
there are still conspicuously few women in national politics and 
in top government positions. Only six women were elected to Con- 
gress in 1989, and only one woman held ministerial rank in Presi- 
dent Aylwin's government. Yet close to half of all Chileans who 
were affiliated with parties in 1992 were women, and slightly more 
than half of the electorate is composed of women. 

The military government redrew electoral boundaries to create 
sixty legislative districts, each of which would send two represen- 
tatives to the Chamber of Deputies. Redistricting favored smaller 
and more rural districts that were deliberately designed to favor 
progovernment parties. Thus, one vote in District 52, which was 
a government stronghold in the plebiscite, was worth three times 
more than one vote in District 18, in which the opposition had fared 
better. By reducing the electoral districts to an average represen- 
tation of two deputies per district, the military authorities sought 
to create an electoral formula that would provide supporters of the 
Pinochet regime with a majority of the seats in the legislature, with 
a level of support comparable to Pinochet's vote in the plebiscite, 
or about 40 percent of the turnout. 

According to the new law, parties or coalitions continue to present 
lists with a candidate for each of the two seats to be filled. The 
law considers both the votes for the total list and the votes for in- 
dividual candidates. The first seat is awarded to the party or coali- 
tion with a plurality of votes. But the first-place party list must 
receive twice the vote of the second-place list, if it is to win the 
second seat. This means that in a two-list contest a party can ob- 
tain one seat with only 33.4 percent of the vote, whereas a party 
must take 66.7 percent of the vote to gain both seats. Any elector- 
al support that the largest party gets beyond the 33.4 percent 
threshold is effectively wasted unless that party attains the 66.7 per- 
cent level. 

The designers of the electoral system considered the worst-case 
scenario to be one that assumed a complete unity of purpose among 
the anti-Pinochet forces, a unity that would at best provide them 
with 50 percent of Congress. Government officials were convinced 
that another scenario was more likely: the parties of the center-left 
would soon fragment, unable to maintain the unity born of their 
common desire to defeat Pinochet. The military government en- 
visioned multiple lists, with the list of the right being the largest, 
able to double the next competing list in many constituencies and 



243 



Chile: A Country Study 

thus assuring the promilitary groups at least half of all elected 
representation, if not a comfortable majority. 

For the parties of the right, the worst-case scenario came to pass. 
Showing remarkable focus and discipline, the fourteen parties of 
the opposition structured a common list and chose a common 
presidential candidate, and as a result the coalition garnered a 
majority of the elected seats. The binomial electoral system (see 
Glossary) did, however, benefit the right. National Renewal ob- 
tained many more seats than it should have in light of the percen- 
tages of the vote it received nationally. The system also forced parties 
to coalesce into large blocs to maximize their strengths. The result 
was two broad coalitions, not a two-party system. Indeed, the results 
of the 1989 congressional elections, despite the requirements of the 
binomial system and the constitution that broad slates be formed 
by these party coalitions, reveals that the Chilean electorate split 
its vote for individual candidates in a manner reminiscent of tradi- 
tional tendencies. Thus, the right obtained 38 percent of the vote; 
the center, 24 percent; and the left 24.3 percent. 

Survey research corroborated that the electorate was likely to 
continue to identify with left-right terms of reference. In March 
1993, about 22.8 percent of respondents classified themselves as 
politically right or center-right; 24.6 percent as center; and 33.7 
percent as center-left. Only 19 percent refused to opt for an ideo- 
logical identification (see table 40, Appendix). These figures differ 
somewhat from the electoral results reported previously but are con- 
sistent with trends indicating that the right lost some of its appeal 
during the Aylwin government, while the moderate left gained. 

Despite attempts at political engineering, not only did Chileans 
continue to identify with broad ideological tendencies, but they also 
identified with a wide range of parties explicitly considered to em- 
body those tendencies. In surveys, between 70 percent and 80 per- 
cent of all Chileans identified themselves with particular parties, 
a high level considering the many years of military rule and the 
experience of other democratic countries. Identification with in- 
dividual parties increased during the first three years of the Aylwin 
government. In the March 1993 survey, more than a third of the 
respondents identified themselves with the Christian Democrats, 
20 percent with the leading parties of the left, and 20 percent with 
the principal parties of the right. The rest identified themselves 
with smaller parties of the left, center, and right (see table 41 , Ap- 
pendix). 

The survey findings do not mean that the ideological polariza- 
tion of the past has remained constant. The Chilean electorate still 
segments itself into three roughly equal thirds, but the distance 



244 



Government and Politics 



between its left and right extremes has narrowed substantially. With 
its more radical program, the PCCh was not able to win more than 
6.5 percent of the vote in municipal elections. In surveys taken 
during the 1990-93 period, fewer than 2 percent of respondents 
preferred the PCCh. Right-wing nationalist parties associated with 
the military government had even less appeal and did not ever 
register on surveys. The far left of the Socialist Party had lost ground 
to the more moderate tendencies of the party, and the authoritari- 
an right had developed no significant electoral following. Ideolog- 
ical moderation also characterized the centrist Christian Democrats, 
who no longer defended the "third way" between Marxists and 
capitalists that they advocated in the 1960s. Perhaps the strongest 
indication of programmatic moderation was the consensus in post- 
military Chile on free-market economics and the important role 
of the private sector in national development. 

As Chile approached the twenty-first century, differences among 
parties were no longer based on sharply differing visions of Uto- 
pias. Ideological differences now concerned more concrete mat- 
ters, such as the degree of government involvement in social services 
and welfare or, increasingly, moral questions such as divorce and 
abortion. A narrowing of programmatic differences did not mean, 
however, that the intensely competitive, multiparty nature of 
Chilean politics was likely to change in the near future. 

The Parties of the Left 

The Communist Party of Chile (Partido Comunista de Chile — 
PCCh) is the oldest and largest communist party in Latin Ameri- 
ca and one of the most important in the West. Tracing its origins 
to 1912, the party was officially founded in 1922 as the successor 
to the Socialist Workers' Party (Partido Obrero Socialista — POS). 
It achieved congressional representation shortly thereafter and 
played a leading role in the development of the Chilean labor move- 
ment. Closely tied to the Soviet Union and the Third Internation- 
al (see Glossary), the PCCh participated in the Popular Front 
(Frente Popular) government of 1938, growing rapidly among the 
unionized working class in the 1940s. Concern over the PCCh's 
success at building a strong electoral base, combined with the on- 
set of the Cold War, led to its being outlawed in 1948, a status 
it had to endure for almost a decade. By midcentury the party had 
become a veritable political subculture, with its own symbols and 
organizations and the support of prominent artists and intellectu- 
als, such as Pablo Neruda, the Nobel Prize- winning poet, and Viole- 
ta Parra, the songwriter and folk artist. 



245 



Chile: A Country Study 



As a component of the Popular Unity coalition that elected Sal- 
vador Allende to the presidency in 1970, the PCCh played a strong 
moderating role, rejecting the more extreme tactics of the student 
and revolutionary left and urging a more deliberate pace that would 
set the groundwork for a communist society in the future. The mili- 
tary government dealt the PCCh a severe blow, decimating its 
leadership in 1976. Although the party called for a broad alliance 
of all forces opposed to the dictatorship, by 1980 it moved to a 
parallel strategy of armed insurrection, preparing cadres of guer- 
rillas to destabilize the regime and provide the party with the mili- 
tary capability to take over the state should the Pinochet government 
crumble. 

After the attempt on Pinochet's life in 1986, the democratic par- 
ties began to distance themselves from the PCCh because the PCCh 
was openly opposed to challenging the regime under the regime's 
own rules. The PCCh's strong stand against registration of voters 
and participation in the plebiscite alienated many of its own sup- 
porters and long-time militants, who understood that most of the 
citizenry supported a peaceful return to democracy. 

Particularly problematic for the party was the Manuel Rodriguez 
Patriotic Front (Frente Patriotica Manuel Rodriguez — FPMR), 
an insurrectionary organization spawned by the PCCh. The party 
found the FPMR difficult to rein in, and the FPMR continued 
to engage in terrorism after the demise of the military government. 
The FPMR had eclipsed Chile's better-known revolutionary group, 
the Movement of the Revolutionary Left (Movimiento de la Iz- 
quierda Revolucionaria — MIR), formed in the 1960s by universi- 
ty students, a movement that barely survived the repression of the 
military years. During the Aylwin administration, a group known 
as the Lautaro Youth Movement (Movimiento Juvenil Lautaro — 
MJL), an offshoot of the United Popular Action Movement-Lautaro 
(Movimiento de Accion Popular Unitario-Lautaro — MAPU-L), 
sought without success to maintain a "revolutionary" offensive (see 
Terrorism, ch. 5). 

The dramatic failure of the PCCh's strategy seriously under- 
mined its credibility and contributed to growing defections from 
its ranks. The party was also hurt by the vast structural changes 
in Chilean society, particularly the decline of traditional manufac- 
turing and extractive industries and the weakening of the labor 
movement. The collapse of the Soviet Union and its East Europe- 
an allies represented a final blow. Although the PCCh obtained 
6.5 percent of the vote in the 1992 municipal elections, by mid- 1993 
it was enjoying less than 5 percent support in public opinion sur- 
veys and did not fare well in the 1993 presidential race. 



246 



Government and Politics 



The Socialist Party (Partido Socialista), formally organized in 
1933, had its origins in the incipient labor movement and working- 
class parties of the early twentieth century. The Socialist Party was 
far more heterogeneous than the PCCh, drawing support from blue- 
collar workers as well as intellectuals and members of the middle 
class. Throughout most of its history, the Socialist Party suffered 
from a bewildering number of schisms resulting from rivalries and 
fundamental disagreements between leaders advocating revolution 
and those willing to work within the system. 

The Socialist Party's greatest moment was the election of Sal- 
vador Allende to the presidency in 1970. Allende represented the 
moderate wing of a party that had veered sharply to the left. The 
Socialist Party's radical orientation contributed to continuous po- 
litical tension as the president and the PCCh argued for a more 
gradual approach to change and the Socialists sought to press for 
immediate "conquests" for the working class. 

After the overthrow of Allende 's Popular Unity government, the 
Socialist Party suffered heavy repression and soon split into numer- 
ous factions. Some joined with the Communists in supporting a 
more insurrectionary strategy. Another faction of "Renewed Socia- 
lists," led primarily by intellectuals and exiles in Western Europe, 
argued for a return to a moderate socialism for which democratic 
politics was an end in itself. The latter faction broke with the 
Marxist- Leninist line of the immediate past, embracing market eco- 
nomics and a far more pluralist conception of society. Guided by 
leaders such as Ricardo Lagos Escobar and Ricardo Nunez Mu- 
fioz, the Renewed Socialists reached an accord with the Christian 
Democrats to mount a common strategy to bring an end to the 
military government. 

Prior to the 1988 plebiscite, the Socialists launched the Party 
for Democracy (Partido por la Democracia — PPD) in an effort to 
provide a broad base of opposition to Pinochet, one untainted by 
the labels and struggles of the past. Led by Lagos, an economist 
and former university administrator, the PPD was supposed to be 
an "instrumental party" that would disappear after the defeat of 
Pinochet. But the party's success in capturing the imagination of 
many Chileans led Socialist and PPD leaders to keep the party label 
for the subsequent congressional and municipal elections, work- 
ing jointly with the Christian Democrats in structuring national 
lists of candidates. 

The success of the PPD soon created a serious dilemma for the 
Socialist Party, which managed to reunite its principal factions — 
the relatively conservative Socialist Party- Almeyda, the moderate 
Socialist Party-Nunez "renewalists," and the left-wing Unitary 



247 



Chile: A Country Study 

Socialists — at the Socialist Party congress in December 1990. 
Heretofore an instrument of the Socialists, the PPD became a party 
in its own right, even though many Socialists had dual member- 
ship. Although embracing social democratic ideals, PPD leaders 
appeared more willing to press ahead on other unresolved social 
issues such as divorce and women's rights, staking out a distinct 
position as a center-left secular force in Chilean society capable 
of challenging the Christian Democrats as well as the right on a 
series of critical issues. 

As the PPD grew, leaders of the Socialist Party insisted on 
abolishing dual membership for fear of losing their capacity to en- 
large the appeal of the Socialist Party beyond its traditional con- 
stituency. By 1993 both parties, working together in a somewhat 
tense relationship, had comparable levels of popular support in opin- 
ion polls. In a March 1993 survey by the Center for Public Studies 
(Centro de Estudios Publicos — CEP) and Adimark (a polling com- 
pany), 10.6 percent of Chilean voters identified with the PPD while 
8.5 percent registered a preference for the Socialist Party. As the 
1993 presidential election approached, PPD leader Ricardo La- 
gos signaled his intention to challenge the Christian Democrats for 
the presidential candidacy of the CPD. His move indicated the de- 
termination of the parties of the moderate left to remain an im- 
portant force in Chilean politics. However, Christian Democrat 
Eduardo Frei Ruiz-Tagle, son of the former president, defeated 
Lagos in a convention of CPD parties held on May 23, 1993, mak- 
ing him the strong favorite to win the presidential elections sched- 
uled for December 11, 1993. Frei Ruiz-Tagle won by a vote of 
60 percent, while Lagos received 38 percent. 

Other parties that could be placed on the center-left included 
the Humanist-Green Alliance (Alianza Humanista- Verde) and the 
Social Democratic Party (Partido Social Democratico), an offshoot 
of the Radical Party, which managed to elect one of its leaders to 
the Senate. These new parties were successful in mobilizing sup- 
port against Pinochet in the plebiscite but faltered in subsequent 
elections. 

The Parties of the Center 

The Christian Democratic Party (Partido Democrata Cristiano — 
PDC), formally established in 1957, traces its origins to the 1930s, 
when the youth wing of the Conservative Party, the Conservative 
Falange (Falange Conservativa), heavily influenced by the progres- 
sive social doctrines of the Roman Catholic Church and the works 
of French Catholic philosopher Jacques Maritain, broke off to form 
the National Falange in 1938. Although the PDC remained small 



248 



Government and Politics 



for many years, it came to prominence in the 1940s, when party 
leader Eduardo Frei Montalva became minister of public works. 
The party's fortunes gradually improved as the leadership of the 
Roman Catholic Church shifted from an embrace of the right 
toward a more progressive line that paralleled the reformist bent 
of the Falangist leadership. The PDC came into its own in 1957, 
when it adopted its present name after uniting with several other 
centrist groups. It elected Frei to the Senate while capturing four- 
teen seats in the Chamber of Deputies. The party polled 20 per- 
cent of the vote in the presidential race in 1958, with Frei as 
standard-bearer. In 1964, with the support of the right, which feared 
the election of Allende, Frei was elected president on a platform 
proclaiming a "third way" between Marxism and capitalism, a 
form of communitarian socialism of cooperatives and self-managed 
worker enterprises. 

Although the PDC grew significantly during Frei's presidency 
and succeeded in obtaining the largest vote of any single party in 
contemporary Chilean history in the 1965 congressional race, the 
Christian Democrats were not able to overcome the tripartite di- 
vision of Chilean politics. Its candidate in the 1970 election, 
Radomiro Tomic Romero, came in third with 27.8 percent of the 
total vote. 

The PDC soon broke with Allende, rejecting measures issued 
by decree without legislative support and shifting to an alliance 
with the parties of the right. Although the PDC leadership, which 
by 1973 had returned to the more conservative orientation, wel- 
comed the coup as "inevitable," a significant minority condemned 
it. Within months, the party began to distance itself from the mili- 
tary government over the new regime's strongly antipolitical cast, 
its human rights violations, and its clear intention of remaining 
in power indefinitely. By 1980 the PDC was playing a leadership 
role in opposition to the military regime. 

In the aftermath of the military regime, the PDC emerged as 
Chile's largest party, with the support of about 35 percent of 
the electorate. The PDC had been divided internally by a series 
of ideological, generational, and factional rivalries. A large num- 
ber of party followers identified themselves as center-left, while 
many viewed themselves as center- right. The PDC retained a com- 
mitment to social justice issues while embracing the free-market 
policies instituted by the military government. However, the com- 
munitarian ideology of the past receded in importance, and the 
Christian Democrats remained reluctant to take issue with the 
Roman Catholic Church's stands on divorce and abortion. 



249 



Chile: A Country Study 

Although the Aylwin administration was a coalition government, 
the PDC secured ten of twenty cabinet seats. In the 1989 elections, 
the Christian Democrats also obtained the largest number of con- 
gressional seats, with fourteen in the Senate and thirty-eight in the 
Chamber of Deputies. In October 1991, in a major challenge to 
President Aylwin and the traditional leadership of the party, Edu- 
ardo Frei Ruiz-Tagle was elected PDC president, placing him in 
a privileged position to run for president as the candidate of the 
CPD. 

Another party that could be classified as centrist was the Radi- 
cal Party, whose political importance outweighed its electoral 
presence. The Radical Party owed its survival as a political force 
to the binomial electoral law inherited from the military govern- 
ment and the desire of the Christian Democrats to use the Radical 
Party as a foil against the left. It was to the Christian Democrats' 
advantage to provide relatively more space to the Radicals on the 
joint lists than to their stronger PPD partners. The Radicals suc- 
ceeded in electing two senators and five deputies in 1989 and were 
allotted two out of twenty cabinet ministers, despite polls report- 
ing that they had less than 2 percent support nationally. It remained 
to be seen if, over the long run, the Radical Party could compete 
with Chile's other major parties, particularly the PPD, which had 
moved closest to the Radical Party's traditional position on the po- 
litical spectrum. 

The Parties of the Right 

In 1965, following the dramatic rise of the Christian Democrats, 
primarily at their expense, Chile's two traditional right-wing par- 
ties, the Liberal Party and Conservative Party, merged into the 
National Party (Partido Nacional). Their traditional disagreements 
over issues such as the proper role of the Roman Catholic Church 
in society paled by comparison with the challenge posed by the left 
to private property and Chile's hierarchical social order. The new 
party, energized by the presidential candidacy of Jorge Alessandri 
in 1970, helped the right regain some of its lost electoral ground. 
The National Party won 21.1 percent of the vote in the 1973 con- 
gressional elections, the last before the coup. 

The National Party was at the forefront of the opposition to the 
Allende government, working closely with elements of the busi- 
ness community. National Party leaders welcomed the coup and, 
unlike the Christian Democrats, were content to accept the mili- 
tary authorities' injunction that parties go into "recess." Until 1984 
the National Party remained moribund, with most of the party lead- 
ers concerning themselves with private pursuits or an occasional 



250 



Government and Politics 



embassy post. With the riots of 1983 and 1984, leaders on the right 
began to worry about the return of civilian politics and the challenge 
of rebuilding party organizations. In 1987 three rightist organi- 
zations — the National Unity Movement (Movimiento de Unidad 
Nacional — MUN), representing many of Chile's traditional lead- 
ers of the right; the National Labor Front (Frente Nacional del 
Trabajo — FNT), headed by a more nationalistic group tied to small 
business and rural interests; and the Independent Democratic Union 
(Union Democrata Independiente — UDI), constituted by former 
junta advisers and officials of the military government — joined to 
form National Renewal as a successor to the National Party. The 
uneasy alliance soon broke apart as the UDI signaled its strong 
support for the plebiscite of 1988 and a Pinochet candidacy, while 
MUN indicated its preference for an open election or a candidate 
other than Pinochet. 

With Pinochet's defeat, National Renewal's prestige rose con- 
siderably. In the aftermath of the plebiscite, National Renewal 
worked closely with the other opposition parties to propose far- 
reaching amendments to the constitution. National Renewal, 
however, could not impose its own party president, Sergio Onofre 
Jarpa, having to concede the presidential candidacy of the right 
to the UDI's Biichi. After the 1989 congressional race, National 
Renewal emerged as the dominant party of the right, benefiting 
strongly from the electoral law and electing six senators and twenty- 
nine deputies. Its strength in the Senate meant that the Aylwin 
government had to compromise with National Renewal to gain sup- 
port for key legislative and constitutional measures. National 
Renewal saw much of its support wane in the wake of party scan- 
dals involving its most promising presidential candidates, whereas 
the UDI's positive image grew. 

While National Renewal drew substantial support from rural 
areas and traditional small businessmen, the UDI appealed to new 
entrepreneurial elites and middle sectors in Chile's rapidly grow- 
ing modern sector. The UDI also made inroads in low-income 
neighborhoods with special programs appealing to the poor, a legacy 
of the Pinochet regime's urban policy. The assassination of UDI 
founder Senator Jaime Guzman Errazuriz on April 1, 1991, was 
a serious blow, depriving the party of its strongest leader. 

A discussion of the parties of the right would not be complete 
without a mention of the Union of the Centrist Center (Union de 
Centro Centro — UCC), a loose organization created by Francis- 
co Errazuriz. Because parties of the left like to call themselves 
"center-left" and parties of the right "center-right" to avoid be- 
ing labeled as extremist, Errazuriz coined the somewhat redundant 



251 



Chile: A Country Study 



name of the UCC to show that he is the only centrist-centrist. The 
UCC had no party organization and no clear programmatic orien- 
tation. Yet it regularly commanded the support of about 5 percent 
of the electorate, enough to place the party in a privileged position 
to bargain for places on the party lists of either the right or the 
CPD, giving Errazuriz more clout than his real support would in- 
dicate. 

The advent of the 1993 presidential race underscored the con- 
tinued rivalry of the parties of the right. Reformers in National 
Renewal failed in their effort to provide the nation with a new gener- 
ation of rightist leaders as Senator Sebastian Pifiera and Congress- 
woman Evelyn Matthei canceled themselves out in a bitter struggle. 
Only after months of charges and countercharges, and in the face 
of the CPD's remarkable capacity for unity, could National Unity, 
the UDI, and the UCC succeed in structuring a joint congressional 
list and selecting a presidential candidate. 

The 1993 Presidential Election 

The compromises struck in the 1980 constitutional reform dis- 
cussions between the military government and the opposition led 
to the limitation of President Aylwin's term to four years, half of 
the normal term contemplated in the constitution. This meant that 
by mid- 1992 parties and leaders were already jockeying to prepare 
the succession. Leaders of the Aylwin government, including promi- 
nent cabinet members, made no secret of their desire to put forth 
the name of Alejandro Foxley Riesco, the minister of finance, as 
a man who would guarantee stability and continuity. A Christian 
Democrat, Foxley had presided ably over the delicate task of main- 
taining economic stability and promoting growth. 

Within the CPD, however, there was considerable disagreement 
over a Foxley candidacy. Christian Democrats controlling the party 
organization, who had not been favored with prominent govern- 
mental positions, pushed the candidacy of Eduardo Frei Ruiz-Tagle, 
son of the former president, as an alternative. Frei's candidacy was 
given an enormous boost when he succeeded in defeating several 
Christian Democratic factions, including the Aylwin group, by cap- 
turing the presidency of the PDC. In the first open election for 
party leadership among all registered Christian Democrats, Frei, 
drawing on the magic of his father's name, scored a stunning 
victory. 

While most observers presumed that from his position as PDC 
president Frei would be able to command the nomination of the 
center-left alliance, elements in the Socialist Party and the PPD 
argued that the nomination in the second government should go 



252 



Eduardo Frei Ruiz-Tagle, 
president 
March 11, 1994- 
Courtesy Embassy of Chile, 
Washington, and 
El Mercurio, Santiago 



to a Socialist, not a Christian Democrat. This was the position of 
Ricardo Lagos, a minister of public education in the Aylwin cabi- 
net and the most prominent leader of the moderate left. Lagos, 
who was defeated for a Senate seat in Santiago by the vagaries of 
the electoral law, remained one of the most popular leaders in Chile 
and was widely praised for his tenure in the Ministry of Public Edu- 
cation. 

A Lagos candidacy, however, implied the serious possibility that 
the CPD would break up. Christian Democrats pointed to their 
party's significant advantage in the polls and noted that the coun- 
try might not be ready for a candidate identified with the Socialist 
Party. Lagos faced opposition within the PPD and the Socialist 
Party among leaders who thought that risking the unity of the CPD 
could only play into the hands of forces that would welcome a vic- 
tory of the right or an authoritarian reversal. Lagos, in turn, ar- 
gued that the Socialists could be relegated to the position of a 
permanent minority force within the coalition if they did not have 
the opportunity to present their own candidate. The constitution- 
al provision for a second electoral round, in case no candidate ob- 
tained an absolute majority in the first round, would permit the 
holding of a kind of primary. The CPD candidate that failed to 
go into the second round of the two finalists would simply support 
the CPD counterpart. Lagos, however, was not able to persuade 
either the Christian Democrats or his own allies to launch two 



253 



Chile: A Country Study 

center-left presidential candidacies spearheading one joint list for 
congressional seats. Instead, he had to settle for a national con- 
vention in which Frei handily defeated him with his greater or- 
ganizational strength. 

The right had even more difficulty coming up with a standard- 
bearer. National Renewal was intent on imposing its own candidacy 
this time and sought to elevate one of its younger leaders to carry 
the torch. Bitter opposition by the UDI and the destructive inter- 
nal struggle within National Renewal precluded Chile's largest 
party on the right from selecting the standard-bearer of the coali- 
tion. After a bitter and highly destructive process, the parties of 
the right, including the UCC, finally were able to structure a joint 
congressional list and turn to Arturo Alessandri Besa, a senator 
and businessman, as presidential candidate. 

Several other candidates were presented by minor parties. The 
PCCh, which had reluctantly supported Aylwin in 1989, endorsed 
leftist priest Eugenio Pizarro Poblete, while scientist Manfredo Max- 
Neef ran a quixotic campaign stressing environmental issues. In 
the election held on December 11, 1993, Eduardo Frei scored an 
impressive victory, exceeding the total that Aylwin obtained in 1989. 
Frei's victory underscored the strong support of the CPD's over- 
all policies, bucking the Latin American trend of failed incum- 
bent governments. Frei obtained 57.4 percent of the vote to 
Alessandri's 24.7 percent (see table 42, Appendix). The surprise 
in the race was Max-Neef, who, exceeding all expectations, ob- 
tained 5.7 percent of the vote, surpassing the vote for Pizarro, which 
was 4.6 percent. Max-Neef was able to translate his shoestring can- 
didacy into the most significant protest vote against the major can- 
didates. 

The election of the fifty-one-year-old Frei marked the coming 
of age of a new generation of political leaders in Chile. Frei, an 
engineer and businessman, had avoided the political world of his 
father until the late 1980s when he agreed to form part of the Com- 
mittee for Free Elections. Subsequentiy, his party faction challenged 
Aylwin for the leadership of the party prior to the 1989 election. 
Although Frei lost, he laid the groundwork for his successful bid 
for party leadership in 1992 and, eventually, the race for president. 

Frei's election signals the intention of the CPD to remain united 
in a coalition government for the foreseeable future. The designa- 
tion of Socialist Party president German Correa as minister of in- 
terior and Ricardo Lagos 's acceptance of another cabinet post 
underscore the broad nature of the regime. Frei's challenge, 
however, will be to maintain unity while addressing many of the 



254 



Government and Politics 



lingering social issues that still affect Chilean society without up- 
setting the country's economic progress. 

The Church, Business, Labor, and the Media 
The Church 

The Roman Catholic Church has played a central role in Chilean 
politics since colonial days. During the nineteenth century, the ques- 
tion of the proper role of the Catholic Church in society helped 
define the differences among the country's incipient political par- 
ties. The Conservatives, in defending the social order of the colonial 
era, championed the church's central role in protecting that order 
through its control of the educational system and its tutelage over 
the principal rights of passage, from birth to death. They also sup- 
ported the close tie between church and state based on the Span- 
ish patronato real (see Glossary), which provided the president with 
the authority to name church officials. Liberals, and especially Rad- 
icals, drawing on the ideals of the Enlightenment, sought a secu- 
lar order, a separation of church and state in which the state would 
take the primary responsibility for instruction and assume "civil" 
jurisdiction over births, marriages, and the burial of the dead. The 
Liberals and Radicals also promoted the liberal doctrine of the rights 
of man and citizenship, seeking to implement the notion of one 
man-one vote, unswayed by the influence of the upper class or the 
preaching of the clergy. 

During the 1861-91 period, the Liberals were in the ascendan- 
cy, succeeding in their quest to expand the authority of the state 
to the detriment of that of the church. The de jure separation of 
church and state, however, did not occur until the adoption of the 
constitution of 1925. Although a few priests and Catholic laity em- 
braced the progressive social doctrines inspired by papal encycli- 
cals such as Rerum Novarum (1891) and Quadragesimo Anno (1931), 
it was not until the 1950s that the church hierarchy began to loos- 
en its ties to the Conservative Party. Keenly aware of Marxism's 
challenge to their core values and the growing influence of Marxist 
parties, church leaders responded with an increased commitment 
to social justice and reform. Some of the early efforts at breaking 
down Chile's semifeudal land tenure system were undertaken on 
church lands by progressive bishops, notably Bishop Manuel La- 
rrain Errazuriz of Talca in the 1960s. 

The church's shift away from Conservative politics coincided with 
the development of a close alliance between the church elite and 
the emerging Christian Democrats, which contributed to the suc- 
cess of the new party, particularly among women and another 



255 



Chile: A Country Study 



previously disenfranchised group, rural voters. The church, and 
in particular Cardinal Raul Silva Henriquez, the archbishop of San- 
tiago, welcomed the election of Eduardo Frei Montalva to the 
presidency in 1964. 

Relations between the church and Allende, however, were far 
less cordial. Church leaders retained correct relations with the leftist 
government, fearful that the new authorities would make use of 
the public schools for Marxist indoctrination and further under- 
mine the waning influence of the church in society. When Allende 
was overthrown, all of the bishops welcomed the coup and helped 
legitimize the new military junta with solemn ceremonies. Several 
bishops, including the bishop of Valparaiso, remained staunch sup- 
porters of the military for years to come. 

Other church leaders, notably Cardinal Silva, shocked by 
widespread human rights violations and disturbed by the growing 
rift between the armed forces and the church's Christian Democratic 
allies, soon distanced themselves from the military authorities. The 
church, and particularly the archdiocese of Santiago, responded 
by gradually assuming a critical role as a defender of human rights 
and providing an "umbrella" of physical and moral shelter to in- 
tellectuals and party and union leaders. Antagonizing the regime 
and its many supporters in upper- and middle-class sectors, the 
Vicariate of Solidarity (Vicaria de la Solidaridad) helped provide 
for the legal defense and support of victims of the dictatorship. Sil- 
va' s successor, though more conservative, supported the church's 
work in the human rights field and, in 1985, sought to broker the 
National Accord for Transition to Full Democracy. As the plebi- 
scite approached, the Episcopal Conference made clear that it did 
not consider the junta's plan to be democratic and urged Pinochet 
to step down, further aggravating the relationship between the 
authorities and the church. 

With the restoration of democracy, the church retreated from 
the political arena. Following dictates from Rome and the appoint- 
ment of more conservative bishops, relations between the hier- 
archy and the Christian Democrats cooled. Church leaders also 
made it clear that, in recognition of church support for the demo- 
cratic opposition in the difficult years of the dictatorship, they 
expected support from the new government for the church's own 
more conservative agenda. In early 1994, Chile remained one of 
the few countries in the world that did not recognize divorce, and 
issues such as abortion and the role of women in society were not 
fully addressed (see Divorce, Abortion, and Contraception, ch. 
2). Chile's political right made clear that it hoped to capitalize on 



256 



Government and Politics 



these "moral" issues and revive an alliance between clerical authori- 
ties and the parties of the right not seen since the 1940s. 

Although the challenge from the Marxist left had waned, the 
Roman Catholic Church appeared to be engaged in a losing struggle 
to stem the extraordinary growth of Protestant Evangelicals (see 
Glossary). Evangelical groups grew rapidly during the years of mili- 
tary rule, primarily as a result of severe social and economic dislo- 
cations. While the Roman Catholic Church gained adherents and 
supporters through its politicized Christian Base Communities 
(Comunidades Eclesiasticas de Base — CEBs; see Glossary) and the 
work of highly committed priests, tens of thousands of other 
Chileans were seeking a new meaning for their lives by respond- 
ing to the far more flexible and spontaneous religious appeals of 
hundreds of storefront churches. Surveys in Santiago indicated that 
Evangelicals made up close to 15 percent of the population, with 
far larger proportions in shantytowns (poblaciones callampas) and other 
low-income neighborhoods. What is perhaps more significant is 
that active Evangelicals were as numerous as active Catholics (see 
Religion and Churches, ch. 2). 

Business 

Chile's business community has long played an active role in 
the nation's politics. During the years of import-substitution in- 
dustrialization, businesses developed close links with political leaders 
and state agencies, seeking subsidies, tariffs, and other forms of 
regulation that would protect them from the rigors of market com- 
petition domestically and internationally. Indeed, the expansion 
of the state, in particular its decentralized semiautonomous agen- 
cies, led to the creation of semicorporatist boards whose members 
included formal representatives of large business associations. As 
the parties of the right began to decline in importance, business 
leaders became increasingly "apolitical," preferring "independent" 
candidates such as Jorge Alessandri to those with strong party ties. 

In the early 1990s, most businesses in Chile employed only a 
handful of workers, and business trade groups probably represented 
less than 20 percent of all business establishments in the country. 
Small businesses were represented by the Council of Small and 
Medium Enterprises (Consejo de la Pequefia y Mediana Indus- 
tria — CPMI), and large businesses were represented by the Cham- 
ber of Production and Commerce (Camara de la Produccion y 
Comercio — CPC). Small and medium- sized business groups were 
in turn divided into associations, such as the Truck Owners As- 
sociation (Asociacion Gremial de Duenos de Camiones) and the 
Federation of Retail Business of Chile (Confederacion del Comercio 



257 



Chile: A Country Study 

Detallista de Chile). The most important of the associations affiliated 
with the CPC were the Industrial Development Association (So- 
ciedad de Fomento Fabril — Sofofa) and the National Agricultural 
Association (Sociedad Nacional de Agricultura — SNA), both of 
which had considerable political influence and clout. 

During the Allende years, the associations of both small and large 
businesses played a critical role in combating the parties of the left 
and undermining the Allende government. Small-business associ- 
ations, particularly the truck owners, brought the country to a stand- 
still, aggravating an already difficult economic and political 
situation. Large-business associations also worked hard to depose 
the Popular Unity government. Sofofa, in particular, played an 
important role by supporting a highly cohesive group of economists 
critical of the Allende government who prepared a document that 
served as the basis for the military regime's shift in economic poli- 
cy. Because of their prominent role in bringing down the Allende 
government, business leaders assumed that they would have in- 
fluence over economic policy and be able to reestablish a close and 
mutually beneficial relationship with the state. Much to the busi- 
ness leaders' surprise, the far-reaching structural adjustment poli- 
cies pursued by the military government proved extraordinarily 
disruptive, contributing to the bankruptcy of hundreds of major 
firms. 

Business leaders, already weakened by the reform and revolu- 
tionary policies of the previous two civilian presidents, were too 
dispirited to oppose the determined economic advisers of the mili- 
tary. Small business, which had the most to lose, made some 
gestures toward joining the growing opposition movement after the 
dramatic economic downturn of 1981, only to be kept in line by 
the regime's strategy of using tough measures when necessary and 
moderating its policies at key points just enough to retain private- 
sector allegiance. 

Overall, the lack of strenuous resistance to the regime, particu- 
larly from medium-sized and large businesses, was attributed to 
memories of the traumatic Allende years. Entrepreneurs and bus- 
iness managers feared that any strong opposition on their part might 
weaken the military regime and create the possibility of a return 
to the leftist policies that they felt had practically destroyed the pri- 
vate sector in the past. A weak business community, in combina- 
tion with the private sector's determination not to risk a return 
of the left, gave the military regime wide latitude to restructure 
the economy as it saw fit. 

Because of the weakness of the parties of the right, business groups 
remained influential in right-wing politics after the return to 



258 



Government and Politics 



democracy. In 1989 they were instrumental in imposing an "in- 
dependent" candidate of the right to run for president and actively 
supported one of their own in the presidential race of 1993. Yet 
business associations were less influential in politics in the early 
1990s than previously, largely because of the changes resulting from 
Chile's opening to world markets and, ironically, because of the 
decreased importance of the state in regulating and controlling busi- 
ness. Political leaders and government officials, however, solicited 
the views of business interests on labor and environmental ques- 
tions because of their common desire to encourage continued ex- 
pansion of the Chilean economy (see Social Organizations and 
Associations, ch. 2). 

Labor 

For many decades, Chile had one of the most extensive labor 
movements in the Western Hemisphere. Large increases in un- 
ionization through the 1960s occurred in response to efforts by the 
authorities to organize working-class groups. Intense competition 
between the Christian Democrats and the left added further to the 
extraordinary efforts to mobilize previously disenfranchised groups 
in the late 1960s and early 1970s. 

Under center-left administrations, Chile's workers obtained an 
array of workers' rights and established a collective bargaining sys- 
tem in which the state played a significant role as mediator. Dur- 
ing the Popular Unity years, unions closely tied to the parties of 
the left played important roles in the management of enterprises 
taken over by the state. However, Chile's organized workers hardly 
constituted the revolutionary vanguard envisioned by some sec- 
tors of the far left. They were proud of their "conquests" and en- 
visioned the policies of the Allende government as a continuation 
of favorable treatment for workers. Despite the size of Chile's labor 
movement, labor had little autonomy from party leadership. Most 
labor demands, outside of particular collective bargaining situa- 
tions, responded to the strategies and calculations of party leaders 
both in and out of the government. 

When the coup came, despite the rhetoric of the far left there 
was no independent working-class movement capable of resisting 
the imposition of military rule. With the arrest of labor and party 
leaders, any possibility of resistance vanished. The military regime 
was extremely harsh on organized labor because of its close ties 
to the parties of the left. The principal labor federation, the United 
Labor Federation (Central Unica de Trabaj adores), was disband- 
ed, and many of its leaders were killed, imprisoned, or exiled. The 
authorities adopted a new labor code, which prohibited labor 



259 



Chile: A Country Study 

federations, sharply restricted the right to strike, and gave signifi- 
cant latitude to employers in the hiring and firing of workers and 
in procedures for settling disputes. 

Structural changes in the Chilean economy, particularly the col- 
lapse of large traditional industries that had depended on state sub- 
sidies and tariff protection, combined with the highest levels of urban 
unemployment in Latin America during the 1980s, also exacted 
a harsh toll on the labor movement. By the mid-1980s, the num- 
ber of unionized workers was only one-third of its highest level, 
while the growing numbers of women in the labor force, particu- 
larly in commercial agriculture, remained nonunionized. By 1987 
only about 10 percent of the total work force was unionized; ap- 
proximately 20 percent of industrial labor belonged to unions. Only 
in select areas, such as copper mining, where 60 percent of the wor- 
kers were unionized, was the union movement able to hold its own. 

Despite organized labor's decline, when the military authorities 
attempted to develop an alternative labor movement with a 
"renewed" leadership to their liking, they failed. Even in 
government-mandated elections for new union leaders at the plant 
level, workers tended to select union members who were hostile 
to the government and had close ties to opposition parties. It was 
this "tolerated" labor movement, spearheaded by the Confed- 
eration of Copper Workers (Confederacion de Trabajadores del 
Cobre — CTC), that ignited the widespread protests and strikes 
of 1983 coordinated by the National Workers' Command (Comando 
Nacional de Trabajadores — CNT). Less militant was the cen- 
trist (pro-PDC) Workers' Democratic Federation (Central Demo- 
cratica de Trabajadores — CDT). The government moved swiftly, 
however, to curb all labor activism through repressive measures 
and threats to fire workers, particularly in the copper mines. Party 
leaders soon replaced labor leaders as the principal organizers of 
the growing opposition to the military government. 

In the early 1990s, the principal labor confederation in Chile 
was the Unitary Confederation of Labor (Confederacion Unica de 
Trabajadores — CUT), established in 1988 as the successor to the 
National Trade Union Coordinating Board (Coordinadora Na- 
cional de Sindicatos — CNS), a grouping of industrial, profession- 
al, and mining unions led by leftist Christian Democrats and 
elements of the left. With the return of democracy, labor pressed 
for a more favorable labor code and for social policies that would 
improve the standard of living for the poor. Although the Aylwin 
government was constrained in approving new labor legislation by 
the opposition majority in the Senate, some modifications were 
made to the labor code. The strong climate of opinion in the country 



260 



Government and Politics 



in favor of free markets and minimal government restrictions on 
labor markets, a position embraced by the Aylwin government, 
has hemmed in labor's room for maneuvering. 

The weakness of the labor movement reflected not only the low 
incidence of organized labor in Chile's new economic context but 
also the degree to which labor continued to be controlled by Chile's 
principal parties, parties that were able to exert substantial "labor 
discipline" during Aylwin 's transitional government. There were 
indications, however, that this discipline may have been obtained 
at a cost. There appeared to be dissatisfaction among rank-and- 
file workers with the close relationship between union and party 
leaders and some bitterness about the low priority the government 
accorded their interests, despite government success in changing 
some of the labor laws (see Unions and Labor Conflicts, ch. 3). 

The Media 

Chile has a long tradition of an active press, closely tied to the 
country's competitive political parties. Prior to the 1973 coup, San- 
tiago had ten daily newspapers spanning the ideological spectrum. 
These included, on the left, the Communist El Siglo, the Socialist 
Ultima Horn, and the far-left papers Puro Chile and Clarin. The Chris- 
tian Democrats owned La Prensa. Newspapers identified with the 
center-right or far right included El Mercurio (founded in 1827), 
Las Ultimas Noticias (founded in 1902), La Segunda (founded in 1931), 
La Tercera de la Hora (founded in 1950), and La Tribuna. 

The wide ideological range of Chile's major newspapers did not 
mean that circulation was evenly distributed. All of the newspapers 
supporting the Allende government had a combined circulation of 
less than 250,000, while, for instance, La Tercera de la Hora, a center- 
right paper, had a circulation of 200,000. By far the most impor- 
tant newspaper in Chile has been El Mercurio, with a Sunday cir- 
culation of 340,000 and wide influence in opinion circles. The El 
Mercurio Company, easily the most powerful newspaper group 
in Chile, also owns La Segunda, the sensationalist Las Ultimas Noticias, 
and regional papers. With its close ties to the Chilean Navy (Ar- 
mada de Chile), El Mercurio played a critical role in mobilizing sup- 
port against the Allende government, openly supporting the military 
coup. 

After the coup, Chile's independent press disappeared. The news- 
papers of the left were closed immediately, and the centrist La Prensa 
stopped publishing a few months later. Newspapers that kept pub- 
lishing gave strong support to the military government and submit- 
ted to its guidelines on sensitive issues; they also developed a keen 
sense of when to censor themselves. The print media became even 



261 



Chile: A Country Study 



more concentrated in the hands of two groups: the Edwards fami- 
ly, owners of El Mercurio, with approximately 50 percent of all cir- 
culation nationwide, and the Pico C arias family, owners oiLa Tercera 
de la Hora, with another 30 percent. Only toward the end of the 
military government did two opposition newspapers appear — La 
Epoca, founded in 1987 and run by Christian Democrats, and For- 
tin Mapocho, a publication run by groups on the left that became 
a daily newspaper in 1987. By 1990 Chile had approximately eighty 
newspapers, including thirty- three dailies. 

During the years of military rule, opposition opinion was reflected 
in limited-circulation weekly magazines, the first being Mensaje, 
a Jesuit publication founded in 1951. Over time, magazines such 
as Hoy, a Christian Democratic weekly started in 1977; Andlisis and 
Apsi, two leftist publications that began reaching a national audience 
in 1983; and the biweekly Cauce, established in 1983, all circulated 
under the often realized threat of censorship, confiscation of their 
publications, and arrests of reporters and staff. In perhaps the worst 
case of government suppression, Cauce, Apsi, Andlisis, and Fortin 
Mapocho were all shut down from October 1984 to May 1985. Af- 
ter the restoration of democracy, two conservative weekly maga- 
zines were founded, opposed to the Aylwin government: the 
influential {Que Pasa? (founded in 1971) and Ercilla (founded in 
1936). By 1990 Chile had more than twenty major current affairs 
periodicals. 

The return of civilian government did not lead to an explosion 
of new publications. Both La Epoca and Fortin Mapocho, which had 
received some support from foreign sources, faced enormous finan- 
cial challenges in competing with the established media. Fortin 
Mapocho folded, and La Epoca finally was sold to a business group, 
which retained the newspaper's standards of objective reporting. El 
Mercurio continued to dominate the print media and remained the 
most influential newspaper in the country. The El Mercurio Com- 
pany remained closely tied to business groups that had support- 
ed the military regime but made efforts, particularly through La 
Segunda, to present balanced and fair reporting. The only openly 
pro-CPD newspaper in Chile was the government-subsidized finan- 
cial newspaper, La Nacion, which reflected the views of the authorities. 

Radio traditionally has been dominated by progovernment sta- 
tions, the most notable exceptions being Radio Cooperativa, run 
by Christian Democrats, and Radio Chilena, run by the Roman 
Catholic Church. At first the size of the audience for these two sta- 
tions did not approach the listenership levels of Mineria, Portales, 
and Agricultura — stations identified with the business community. 



262 



Government and Politics 



Radio Tierra, claiming to be the first all-women radio station in 
the Americas, has identified exclusively with women since its es- 
tablishment in 1983 (see Telecommunications, ch. 3). 

Although the opposition had some print outlets, it had no ac- 
cess to television. Not until 1987, in the months leading up to the 
plebiscite, did opposition leaders gain limited access to television. 
The medium was strictly controlled by the authorities and by net- 
work managers: the University of Chile, the Pontifical Catholic 
University of Chile, and the National Television Network of 
Chile — Channel 7 (Television Nacional de Chile — Canal 7). 

Competitive politics transformed television news broadcasting, 
introducing numerous talk shows that focus on politics. Channel 
7, the official station of the military government, was reorganized 
by the junta after Pinochet's defeat as a more autonomous entity 
presenting a broad range of views and striving for more impartial 
news presentation. The station with the widest audience in Chile 
in the early 1990s was the Pontifical Catholic University of Chile's 
Channel 13, offering a right-of-center editorial line. Other chan- 
nels with a more regional focus included Channel 5 of Valparaiso, 
operated by the Catholic University of Valparaiso (Television 
Universidad Catolica de Valparaiso — Canal 5); Channel 1 1 , oper- 
ated in Santiago by the University of Chile (Corporacion de Tele- 
vision de la Universidad de Chile — Canal 11); and two commercial 
channels, Valparaiso's Channel 4 and Santiago's Red Televisiva 
Megavision — Channel 9, owned by the Pinto Claude Group and 
directed by Ricardo Claro. In May 1993, the Luksic Group en- 
tered the private television market by acquiring a 75 percent share 
of Maxivision (TV MAX), broadcast on UHF (ultrahigh frequency) 
in the Metropolitan Region of Santiago. 

The National Council of Television (Consejo Nacional de Tele- 
vision) is charged with regulating the airwaves and setting broad- 
cast standards. Its jurisdiction in matters of censorship is unclear 
in the wake of Supreme Court rulings challenging its decisions. 

Foreign Relations 

Since the early decades after independence, Chile has always had 
an active involvement in international affairs. In 1837 the coun- 
try aggressively challenged the dominance of Peru's port of Cal- 
lao for preeminence in the Pacific trade routes, defeating the 
short-lived alliance between Peru and Bolivia, the Peru-Bolivia 
Confederation (1836-39), in an international war. The war left 
Chile an important power in the Pacific. A second war, the War 
of the Pacific (1879-83), further increased Chile's regional domi- 
nance and international prestige, while adding considerably to its 



263 



Chile: A Country Study 



territory. In the twentieth century, although Chile did not become 
involved in an international war, it continued to maintain one of 
the largest standing armies per population size in the region. 

Because of the prestige of Chile's democratic institutions, Chile's 
diplomatic service is well respected, and Chile has influence far 
beyond the country's size or geostrategic importance. Over the 
years, Chile has played an active role in promoting multilateral 
institutions and supporting democratic and human rights princi- 
ples. Because of its strong ideologically based multiparty system, 
Chileans have widespread contacts with counterpart parties in Eu- 
rope and are present in the international federations of Christian 
Democrats, Socialists, and Communists. These contacts contrib- 
ute to Chile's European orientation. 

During the nineteenth century, Chile's commercial ties were 
primarily with Britain, a country that had a decisive influence on 
the organization of the navy. Culturally and intellectually, Chileans 
felt close to France. The French influenced Chile's legal and educa- 
tional systems and had a decisive impact on Chilean culture, in- 
cluding the architecture of the capital in the boom years at the turn 
of the century. German influence came from substantial German 
immigration to southern Chile and the organization and training 
of the army by Prussians. Aside from important markets for Chilean 
wheat in California, the United States played a decidedly secon- 
dary role. 

Relations with the United States 

Chile has never been particularly close to the United States. The 
distance between Washington and Santiago is greater than the dis- 
tance between Washington and Moscow. In the twentieth century, 
Chile's giant copper mines were developed by United States eco- 
nomic interests, although Europe remained a larger market for 
Chilean products. Chile's democratic governments distanced them- 
selves from European fascism during the world wars and embraced 
the cause of the Allies, despite internal pressures to support the 
Axis powers. Chile later joined with the United States in support- 
ing collective measures for safeguarding hemispheric security from 
a Soviet threat and welcomed United States support in developing 
the Chilean Air Force. But the advent of the Cold War and the 
official Chilean policy of support for the inter-American system 
exacerbated internal conflicts in Chile. The growing presence of 
the Marxist left meant a sharp increase in anti- American sentiment 
in Chilean public opinion, a sentiment that was fueled by opposi- 
tion to the United States presence in Vietnam, the United States 



264 



Government and Politics 



conflict with Cuba, and increased United States intervention in 
domestic Chilean politics. 

During the 1960s, the United States identified Chile as a model 
country, one that would provide a different, democratic path to 
development, countering the popularity of Cuba in the develop- 
ing world. To that end, the United States strongly supported the 
candidacy of Eduardo Frei Montalva in 1964 with overt and covert 
funds and subsequently supported his government in the implemen- 
tation of urban and rural reforms. This support spawned consider- 
able resentment against the United States in Chile's conservative 
upper class, as well as among the Marxist left. 

The election of Allende was viewed in Washington as a signifi- 
cant setback to United States interests worldwide. National Secu- 
rity Adviser Henry Kissinger was particularly concerned about the 
implications for European politics of the free election of a Marxist 
in Chile. Responding to these fears and a concern for growing Soviet 
influence in the Western Hemisphere, the United States embarked 
on a covert campaign to prevent Allende from gaining office and 
to destabilize his government after his election was ratified. 
Although the United States did not have a direct hand in the over- 
throw of Allende, it welcomed the coup and provided assistance 
to the military regime. 

The widespread violations of human rights in Chile, combined 
with a strong rejection of covert activities engaged in abroad by 
the administration of President Richard M. Nixon, galvanized 
United States congressional opposition to United States ties with 
Chile's military government. With the election of Jimmy Carter 
in 1976, the United States took an openly hostile attitude toward 
the Chilean military government, publicly condemning human 
rights violations and pressing for the restoration of democracy. Par- 
ticularly disturbing to the United States government was the com- 
plicity of the Chilean intelligence services in the assassination in 
Washington of Chilean ambassador Orlando Letelier and one of 
his associates, a United States citizen. That incident contributed 
to the isolation of the Pinochet government internationally and led 
to a sharp rift in relations between the two countries. The Chilean 
military turned elsewhere for its procurement needs and encouraged 
the development of a domestic arms industry to replace United 
States equipment (see The Defense Industry, ch. 5). 

With the defeat of Jimmy Carter and the election of Ronald Rea- 
gan, the pendulum in the relations between the two countries swung 
the other way. Reagan argued that anticommunist authoritarian 
regimes should not be antagonized for fear that they might be un- 
dermined, leading to the triumph of a Marxist left, as in Nicaragua. 



265 



Chile: A Country Study 

Chile would be pushed to respect human rights through "quiet 
diplomacy," while the United States government reestablished nor- 
mal ties with the dictatorship. 

The new policy did not last long. After the riots in Santiago in 
1983, the United States began to worry that the Pinochet govern- 
ment was no longer a solution to a potential threat from the far 
left, but part of the problem. United States officials increasingly 
began to reflect the concerns of prominent conservatives in Chile, 
who believed that Pinochet's own personal ambitions could stand 
in the way of a successful transition back to civilian rule. 

The shift in policy became far more apparent in Reagan's se- 
cond term, when the Reagan administration, struggling to oppose 
the leftist government of Nicaragua, sought to show its consisten- 
cy by criticizing the right-wing government of Chile. The United 
States made it clear that it did not see the Pinochet government's 
plebiscite as a satisfactory step toward democracy and conducive 
to open and competitive elections. Whereas in the early 1980s the 
United States government had embraced the military regime while 
refusing to take the democratic opposition seriously, by the end 
of the decade the United States was actively backing the opposi- 
tion in its effort to obtain a fair electoral process so that it could 
attempt to defeat Pinochet at his own game. Pinochet's defeat was 
considered by Washington to be a vindication of its policies. 

With the election of Patricio Aylwin in Chile, relations between 
the two countries improved greatly. The administration of George 
Bush welcomed Chile's commitment to free-market policies, while 
praising the new government's commitment to democracy. The 
United States also supported the Aylwin government's human rights 
policies and came to a resolution of the Letelier assassination by 
agreeing to a bilateral mediation mechanism and compensation of 
the victims' families. 

A few issues have complicated United States-Chile relations, in- 
cluding the removal of Chilean fruit from United States supermar- 
kets in 1991 by the Food and Drug Administration, after tainted 
grapes were allegedly discovered. The United States also objected 
to Chile's intellectual property legislation, particularly the copy- 
ing of drug patents. However, these issues pale by comparison with 
the strong ties between the two countries and the admiration that 
United States officials have expressed for Chile's remarkable eco- 
nomic performance. As evidence of this "special" relationship, both 
the Bush and the Clinton administrations have indicated United 
States willingness to sign a free-trade agreement with Chile in the 
aftermath of the successful negotiations with Mexico on the North 



266 



President Patricio Aylwin Azocar 
with President George Bush 
at the White House, 
May 13, 1992 
Courtesy, The White House 



Enrique Silva Cimma, 



Courtesy Embassy of 
Ch He, Wash ington 



Aylwin' s minister 
of foreign relations 



American Free Trade Agreement (NAFTA — see Glossary). Al- 
though Chile has pressed strongly for the agreement as a way to 
ensure access to United States markets, the United States in 1991 
was replaced by Japan as Chile's largest trading partner, with the 
United States accounting for less than 20 percent of Chile's world 
trade. Ironically, in the post-Cold War era, anti- Americanism in 
Chile is more prevalent in military circles and among the tradi- 
tional right, still bitter about United States support for demo- 
cratic parties prior to the plebiscite and concerned that the United 
States has hegemonic presumptions over the region. 

Other Foreign Relations 

With the military coup of 1973, Chile became isolated politically 
as a result of widespread human rights abuses. The return of 
democracy in 1990 opened Chile once again to the world. Presi- 
dent Patricio Aylwin traveled extensively to Europe, North Ameri- 
ca, and Asia, reestablishing political and economic ties. Particularly 



267 



Chile: A Country Study 



significant was Chile's opening to Japan, which has become Chile's 
largest single trading partner. 

In Latin America, Chile joined the Rio Group (see Glossary) 
in 1990 and played an active role in strengthening the inter- 
American system's commitment to democracy as a cardinal value. 
However, Chile has shied away from regional economic inte- 
gration schemes, such as the Southern Cone Common Market 
(Mercado Comun del Cono Sur — Mercosur; see Glossary), argu- 
ing that the country is better off opening its economy to the world, 
rather than building regional markets with neighboring countries. 
Where in the past Chile drew on the prestige of its democratic in- 
stitutions to bolster its international standing, the extraordinary 
success of Chile's economic performance in the early 1990s has given 
Chile the status of a "model" country, with a global rather than 
regional focus. 

Chile's relations with other Latin America countries have im- 
proved considerably with the return of legitimate governments in 
the region. However, serious border disputes still cloud relations 
with the country's three contiguous neighbors. Chile's victory over 
Peru and Bolivia in the War of the Pacific meant that Bolivia lost 
the province of Antofagasta and became landlocked, while Peru 
lost its southern province of Tarapaca. The quest to regain access 
to the sea became the major foreign policy objective for Bolivia 
and is still a source of tension with Chile. The two countries do 
not maintain full diplomatic relations. A treaty signed in 1929 
resolved major boundary disputes with Peru that arose following 
the War of the Pacific, but many Peruvians do not accept the terms 
of the treaty. Tensions between the two countries reached danger- 
ous levels in 1979, the centennial of the War of the Pacific. 

Chile's most serious border conflict was with Argentina and con- 
cerned three islands — Picton, Lennox, and Nueva — that are lo- 
cated south of the Beagle Channel. The two countries agreed to 
submit to arbitration by Britain's Queen Elizabeth II. In May 1977, 
the queen ruled that the islands and all adjacent formations be- 
longed to Chile. Argentina refused to accept the ruling, and rela- 
tions between the two countries became extremely tense, moving 
to the brink of open warfare. In 1978 the two countries agreed to 
allow the pope to mediate the dispute through the good offices of 
Cardinal Antonio Samore, his special envoy. The pope's ruling 
resulted in the ratification of a treaty to settle the dispute in Rome 
in May 1985. With the inauguration of democratic governments 
in both countries, relations improved significantiy. In August 1991, 
presidents Aylwin and Carlos Saul Menem signed a treaty that 
resolved twenty-two pending border disputes, while agreeing to 



268 




Source: Based on information from Chile, Instituto Geografico Militar, Alias Geogrdfico de Chile, Santiago, 1988, 39. 

Figure 12. Chile's Claims in Antarctica, 1993 



270 



Chile: A Country Study 



This pattern of "forced consensus," however, could not con- 
tinue indefinitely. As the new Frei administration was inaugurat- 
ed on March 1 1 , 1994, it was clear that members of Congress and 
lower-level leaders resented their lack of significant input into the 
policy process. The lack of authority in the legislature created the 
risk that Congress would become an essentially negative institu- 
tion seeking to undermine the executive, with no significant role 
in developing arenas of accommodation and consensus that had 
served Chile so well in previous eras. 

Particularly vexing is incompatibility between a presidentialist 
form of government and a highly institutionalized multiparty sys- 
tem, one in which the president appears unlikely to obtain majori- 
ty support in the presidential race and unlikely to enjoy majority 
support in the legislature. Under such circumstances, Chile will 
need institutional rules and procedures to provide incentives to build 
political coalitions across party lines. Although there is consensus 
in 1993 among the elite on fundamental questions, there is no 
guarantee that consensus will remain once Chile moves away from 
the "heroic politics" of the immediate postauthoritarian period to 
the more "banal politics" of democratic normality. Among the 
many issues that will challenge Chile's parties and, indeed, may 
lead to a reconfiguration of party alliances, are, of course, poverty, 
as well as other matters that have not as yet reached the national 
policy agenda, such as divorce, abortion, the environment, and 
grass-roots political participation. 

Chile's electoral system also poses a challenge. Rather than gener- 
ate a two-party system, the electoral system has encouraged the 
maintenance of broad coalitions, including parties that would prob- 
ably not obtain seats in a fully competitive electoral framework. 
The electoral system could encourage political instability if two 
runners-up were evenly matched. In a political system where the 
forces on the left, right, and center are roughly equal in size, the 
electoral system could lead to the disenfranchisement of one of those 
sectors if the politics of broad coalitions were to break down. 

Finally, it remains clear that Chilean democracy will not be fully 
consolidated until civil- military relations are normalized. Although 
it is important that a democracy insulate the armed forces from 
partisan political meddling in the same way that the judicial sys- 
tem is kept "apolitical," the broad latitude given the armed forces 
in the 1980 constitution threatens democratic stability by shield- 
ing the military institution from civilian oversight. The task of the 
Frei government will be to ease this threat by completing the con- 
stitutional reforms left pending after the 1989 compromises made 
with the outgoing military regime. 



272 



Government and Politics 

* * * 

The classic study in English of politics and government in Chile 
remains Federico G. Gil's The Political System of Chile. Paul W. 
Drake's Socialism and Populism in Chile, 1932-52 and James F. 
Petras's Politics and Social Forces in Chilean Development provide valu- 
able discussions of the politics of Chile in the pre-Allende period. 
There are numerous studies of the Allende years, many of which 
also provide background material on the political conditions in Chile 
leading up to the election of the Popular Unity government. These 
include Paul E. Sigmund's The Overthrow of Allende and the Politics 
of Chile, 1964-1976, Barbara Stallings's Class Conflict and Economic 
Development in Chile, 1958-1973, Mark Falcoff s Modern Chile, 1970- 
1989, Edy Kaufman's Crisis in Allende 's Chile, and Arturo Valen- 
zuela's The Breakdown of Democratic Regimes: Chile. Arturo Valen- 
zuela and J. Samuel Valenzuela's Chile: Politics and Society provides 
an anthology of essays. The Allende years, from the point of view 
of the United States ambassador who served at the time of the coup, 
are described in Nathaniel Davis's The Last Two Years of Salvador 
Allende. 

Studies of the Pinochet years are fewer. The first comprehen- 
sive study of the period of military rule is Pamela Constable and 
Arturo Valenzuela's A Nation of Enemies. A volume of essays provid- 
ing an overview of the first decade of military rule is J. Samuel 
Valenzuela and Arturo Valenzuela's Military Rule in Chile. For cover- 
age of civil-military relations during the 1973-88 period, see also 
Manuel Antonio Garreton Merino's The Chilean Political Process. 
Paul W. Drake and Ivan Jaksic's The Struggle for Democracy in Chile, 
1982-1990 is an anthology covering the transition phase. 

The best study of the Catholic Church in Chile is Brian H. 
Smith's The Church and Politics in Chile. Chile's party system is dis- 
cussed in Timothy R. Scully's Rethinking the Center, Michael Fleet's 
The Rise and Fall of Christian Democracy, and Cesar N. Caviedes's 
Elections in Chile. Frederick M. Nunn's The Military in Chilean His- 
tory provides a historical discussion of the military. A critical dis- 
cussion of the military institution under Pinochet can be found in 
Genaro Arriagada's Pinochet: The Politics of Power. 

United States-Chile relations in the contemporary period are 
treated in Michael J. Francis's The Limits of Hegemony and Paul E. 
Sigmund's The United States and Democracy in Chile. (For further in- 
formation and complete citations, see Bibliography.) 



273 



Chapter 5. National Security 




A series of masculine textile figures on a seventeenth-century Mapuche 
woman's belt called nimintraruwe 



GEOGRAPHICALLY ISOLATED but not immune from occa- 
sional foreign threats over the centuries, Chileans have developed 
some of the strongest military and naval traditions in Latin America. 
The indigenous inhabitants of Chile established a formidable repu- 
tation as warriors, in no small part by warding off Incan attempts 
at conquest in 1460 and 1491 . Even the Spanish conquerors of the 
sixteenth century failed to establish their dominion south of the 
Rio Bio-Bio, which remained, in effect, the southern frontier of 
Chile until more than three centuries later. 

Following its declaration of independence in 1810, Chile became 
the first Latin American country to organize its armed forces on 
a professional basis. Its army and navy quickly earned a reputa- 
tion for effectiveness, engaging in successful wars against the Peru- 
Bolivia Confederation of 1836-39, against Spain in 1865-66, and 
again against Peru and Bolivia in 1879-83. 

Chile's long coastline (6,435 kilometers) and elongated shape cre- 
ate major defense problems, but geographical barriers such as the 
Andes, the Atacama Desert, the Strait of Magellan, and the Bea- 
gle Channel have long helped discourage any thoughts of military 
aggression by neighboring Argentina, Bolivia, and Peru. The Chil- 
ean Army has not engaged in a foreign war since 1883. Beginning 
with the inauguration in 1886 of a staff school, the War Academy 
(Academia de Guerra), under the direction of a captain in the Ger- 
man army, German influence became predominant in the army, 
which achieved such prestige throughout Latin America that many 
of the other states of the region sent selected officers for postgraduate 
training in Chilean military schools. Several countries contracted 
with full-scale Chilean military and naval missions to train their 
armed forces, and Chilean officers taught in the military schools 
of several other Latin American countries. 

Persistent friction with Peru since the War of the Pacific 
(1879-83) has been fueled by Peruvian irredentism in regard to 
the territories ceded to Chile following that conflict, despite the ratifi- 
cation in 1929 of the Treaty of Ancon (also known as the Treaty 
of Tacna-Arica), recognizing their loss. Bolivia also has aspired 
to regain its outlet to the sea through the former coastal province 
of Antofagasta, lost as a result of that war, but has been too weak 
to pursue this objective alone. In early 1994, the possibility of any 
escalation of tension seemed slight in the medium term. 



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Chile: A Country Study 

A continuing frontier dispute with Argentina almost led to war 
at the turn of the twentieth century and again in 1978. Tension 
with Argentina led Chile to break ranks with the rest of Latin 
America and quietly support Britain in the 1982 Malvinas/Falklands 
War between Britain and Argentina, although Chile has support- 
ed Argentina's claim to the islands. The risk of outright hostilities 
between Chile and Argentina was removed by the Beagle Chan- 
nel Treaty of May 1985, an increase in diplomatic contacts, and 
economic agreements since Patricio Aylwin Azocar (1990-94) took 
office as president. Brazil, Ecuador, and to a lesser extent Colom- 
bia have historically been Chile's natural allies, given shared dis- 
putes with Argentina and Peru. In the early 1990s, however, 
relations between Chile and its immediate neighbors have been 
generally normal. Chile has carried out joint naval exercises with 
both Argentina and Peru. Nevertheless, border tensions have sur- 
faced occasionally, particularly with Peru, and the armed forces 
of Argentina and Chile have remained resistant to cooperation. 

Despite a record of subordination to constitutional government 
that was almost unique in Latin America, the Chilean Armed Forces 
(Fuerzas Armadas de Chile) incurred international opprobrium in 
September 1973 when they violently overthrew the democratical- 
ly elected government of Marxist president Salvador Allende Gos- 
sens (1970-73). The military regime, led by General Augusto 
Pinochet Ugarte (1973-90), rebuilt the country's shattered econo- 
my, but it was responsible for extensive human rights abuses. The 
Pinochet regime adopted a new constitution in 1980 that called for 
a plebiscite to renew the presidential mandate for another eight 
years. The candidate was Pinochet himself, having been chosen 
by the military junta. Bowing to domestic and international pres- 
sures, the plebiscite was held under conditions that permitted a 
proper test of the nation's majority will. Pinochet lost, and free 
presidential elections were held in December 1989 in accordance 
with constitutional provisions. Pinochet honored the results of the 
1989 presidential elections by handing over the reins of govern- 
ment to a civilian coalition led by President Aylwin in March 1990. 
However, Pinochet was entitled by the 1980 constitution to remain 
as head of the army for an additional eight years, until 1998, with 
no possibility of removal by the president. 

In 1993 the combined strength of the armed forces was at least 
91,800 (including 54,000 members of the army, 25,000 members 
of the navy, and 12,800 members of the air force). In addition, 
the army reserves had about 50,000 members. 



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National Security 

Military Tradition and the Evolution of the Armed 
Forces 

Early History 

Chile's indigenous Mapuche people established themselves as 
tenacious warriors in the fifteenth century. An attempted invasion 
by the forces of Pachacuti Inca Yupanqui (1438-71) in 1460 was 
held off by the Mapuche in the Valley of Coquimbo. The Incas 
withdrew, defeated, six years later. A second effort at invasion, 
this time by Huayna Capac, son of and successor to Yupanqui, 
enjoyed greater success in 1491, penetrating as far as the Central 
Valley (Valle Central) of Chile before it, too, was turned back by 
the Mapuche. 

The first Spanish attempt at conquest, led by Diego de Almagro 
in 1535-37, was undertaken by a force of 500 to 700 Spaniards 
and as many as 15,000 native Americans. Although this expedi- 
tion penetrated as far as the Rio Maule, Almagro 's forces, finding 
no sign of hoped-for riches and constantly harassed by the Mapuche, 
retreated across the Atacama Desert and returned to Peru without 
establishing any permanent settlements. In 1540 Pedro de Valdivia 
launched a much smaller but longer expedition, leading some 150 
Spaniards and 1,000 native Americans. Valdivia's expedition suc- 
ceeded in establishing the first permanent European settlements 
in Chile. However, Araucanian (particularly Mapuche) resistance 
kept Valdivia from penetrating to any significant degree beyond 
the Rio Bio-Bio. In a Christmas Day battle at Tucapel in 1553, 
Araucanian warriors, led by Lautaro, a legendary chief, slaugh- 
tered a force of Spanish cavalry commanded by Valdivia, who was 
executed. Lautaro had studied the Spaniards and their tactics when 
he was a slave for Valdivia during a period of captivity. After that 
initial success, the indigenous warriors adapted rapidly to European- 
style warfare and soon, using captured horses and weapons, field- 
ed their own cavalry against the invader. 

The Araucanians were contained only with difficulty through- 
out the next three centuries. The Rio Bio-Bio remained the effective 
southern frontier throughout the colonial period. The Araucanians 
made frequent incursions northward, one of which threatened to 
destroy the Spanish settlement in Santiago in 1554. In an attempt 
to defeat these native Americans, Alonso de Rivera created a 
Chilean army of sorts in 1603. By the beginning of the eighteenth 
century, the Araucanian wars had already cost the lives of more 
than 40,000 Spaniards and untold thousands of native Americans. 
Throughout this period, the coastal region was also subjected to 
sporadic attacks by English, French, and Dutch buccaneers. 



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Chile: A Country Study 



The Hispano-Amerindian society that evolved in Spanish- 
controlled Chile thus developed in an environment that was un- 
der a constant shadow of real or potential external threat. These 
circumstances produced a people for whom military defense and 
prowess were important attributes. During the latter years of the 
colonial period, Chile depended for its defense principally on a 
militia, which numbered 16,000 by the beginning of the nineteenth 
century. The Spanish colonial administration was overturned with 
relative ease in 1810, and a small volunteer militia, consisting of 
one battalion of infantry, two squadrons of cavalry, and four com- 
panies of artillery, was established. 

Genesis of the Armed Forces, 1814-36 

In 1814 the royalist forces, based in Peru, took advantage of in- 
ternal dissensions among the various factions of the nationalist 
movement in Chile to mount an invasion. The 5,000-man royalist 
army defeated the 1,800-man nationalist force, led by Bernardo 
O'Higgins Riquelme and Juan Jose Carrera, in the Battle of Ran- 
cagua on October 2, and the remnants of the routed army (300 
men) fled to Mendoza in present-day western Argentina. 

The leaders of the United Provinces of the Rio de la Plata, a 
short-lived (1813-26) federation of the provinces that had made 
up the Viceroy alty of the Rio de la Plata, realized that their posi- 
tion remained insecure following independence in 1816 so long as 
Chile and Peru remained bastions of Spanish power. It was decid- 
ed, therefore, to send an expeditionary force, named the Army of 
the Andes, across the mountains to confront the royalists. The com- 
bined Argentine-Chilean Army of the Andes, under the joint com- 
mand of O'Higgins and Jose de San Martin, set out from San Juan 
in northern Argentina on January 12, 1817. The army consisted 
of 2,795 infantry, 742 cavalry, and 241 artillerymen, who carried 
with them twenty-one guns and sufficient arms to equip a force 
of 15,000. Crossing the Andes at Paso de Uspallata and Paso de 
los Patos, this sizable army took the royalist forces in Chile com- 
pletely by surprise. With only half of the total royalist strength of 
approximately 4,000 available to meet the invaders (the other 2,000 
were deployed mainly in defense of the southern frontier), the 
royalists suffered a decisive defeat at Chacabuco, northeast of San- 
tiago, on February 12, 1817. By the end of 1817, the Chilean Army 
(Ejercito de Chile), consisting of 5,000 soldiers and officers, had 
been established. Despite reverses at Talcahuano on December 16, 
1817, and at Cancha Rayada on March 19, 1818, the allied army 
swept to final victory at Maipu on April 5, 1818. Peru, however, 
remained a royalist stronghold, separated from Chile by the 



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National Security 



Atacama Desert and approachable only by sea (see Wars of In- 
dependence, 1810-18, ch. 1). 

Chile had first attempted to form a navy in 1813, when the United 
States-built frigate Perla and the brigantine Potrillo were acquired 
to break the Spanish blockade of Valparaiso. However, royalist 
elements succeeded in bribing the mercenary crew of the Perla, with 
the result that both vessels fell into the hands of the Spaniards. The 
official history of the Chilean Navy (Armada de Chile) dates from 
February 26, 1817, when the brigantine Aguila was acquired by 
the nationalists. Armed with sixteen guns, the Aguila was commis- 
sioned as the first naval vessel of the Republic of Chile, under the 
command of Raimundo Morris, an Irish mercenary and former 
lieutenant in the British Royal Navy. Under the overall command 
of Manuel Blanco Encalada, the first rear admiral of the Chilean 
Navy, the tiny fleet rapidly tripled in size with the capture of the 
Spanish merchant vessel San Miguel and the recapture of the Perla. 
Additional vessels were added by purchase, the arming of merchant 
ships, and further captures from the enemy. With those acquisi- 
tions, the revolutionary fleet consisted of a small ship of the line, 
two large frigates, and four corvettes. In 1818 the Naval School 
(Escuela Naval) was established, later named the Arturo Prat Naval 
School (Escuela Naval Arturo Prat), after Arturo Prat Chacon, 
naval hero of the War of the Pacific. Then, on November 28, 1818, 
the famous British admiral Thomas Alexander Cochrane (Lord 
Dundonald), who had been forced to resign from the Royal Navy 
following a financial scandal, assumed command of the revolution- 
ary fleet from Blanco Encalada. Within two years, Cochrane 's fleet 
had established control of the sea, and it was then possible to pre- 
pare for an amphibious invasion of Peru. With the help of the 
Chilean fleet, the allied army, headed by San Martin, liberated 
Lima on July 9, 1821, and the independence of Peru was declared 
on July 28. 

When Cochrane left Chile in 1823, Blanco Encalada reassumed 
command of the navy, which was reequipped in 1824. The allies — 
now joined by a substantial force from a republic known as Gran 
Colombia (consisting of present-day Colombia, Panama, and 
Venezuela) and led by Simon Bolivar Palacios and Antonio Jose 
de Sucre — scored successive victories at Junm and Ayacucho in 
August and December 1824, respectively. That year Blanco En- 
calada fought in Callao, Peru, under Bolivar's command. Mean- 
while, despite their defeats on the Chilean mainland and in Peru, 
the royalists had continued to hold out on the Isla de Chiloe, off 
the southern Chilean coast, and were only finally defeated in 1826 



281 



Chile: A Country Study 



after two amphibious campaigns by Blanco Encalada and several 
nationalist reverses. 

Diego Portales Palazuelos, Chile's main political strongman from 
1830 to 1837, reorganized and streamlined the army, putting it 
on a firm basis with three infantry battalions, two regiments of 
cavalry, a squadron of hussars, and a regiment of artillery. The 
General Bernardo O'Higgins Military Academy (Escuela Militar 
"General Bernardo O'Higgins"), founded by O'Higgins on March 
16, 1817, was also reorganized. It provided an uninterrupted flow 
of professional officers from 1832 onward. Portales also reestab- 
lished the civic militias, which were important elements in the 
defense of cities and towns during the colonial period. Over the 
next decades, these militias, whose officers were appointed and 
removed by the ministers of interior, proved to be a significant 
countervailing power to that of the army. They thus contributed 
to the stability of the constitutional government. During the civil 
wars of 1851 and 1859, the authorities relied on the combination 
of civic militas and some army units to defeat the insurrectionists. 

Peru-Bolivia Confederation War, 1836-39 

Fearing a threat to Chilean commercial and shipping interests, 
and even sovereignty by the newly created Peru-Bolivia Confeder- 
ation led by Bolivian general Andres de Santa Cruz y Calahumana, 
Chile declared war on the confederation in 1836. The Chilean Navy, 
gradually run down since the end of the struggle for independence, 
consisted of only two small vessels. Nevertheless, once more it rapid- 
ly tripled its strength by captures from the larger Peruvian fleet. 
Within a year, the Chilean Navy had established control of the sea. 

On land, a Chilean force of approximately 2,800, under the com- 
mand of Blanco Encalada, landed at Islay in southern Peru in Oc- 
tober 1837, occupying Arequipa after a long and arduous march, 
during which the Chileans were decimated by disease. Following 
an encounter at Paucarpata with an army under the command of 
Santa Cruz, the Chilean force concluded a peace treaty, the Treaty 
of Paucarpata, on November 17, before returning to Valparaiso 
rather ignominiously. The Chilean government repudiated the 
treaty in indignation and in 1838 dispatched a better-prepared 
Chilean force under General Manuel Bulnes Prieto. Landing at 
Ancon, north of Lima, on August 6, this force commenced a slow 
march southward toward the Peruvian capital of Lima, while the 
Chilean fleet blockaded the main Peruvian port of Callao. 

Although their advance was delayed by harassment from small 
allied forces, the Chileans were finally able to lay siege to Lima. 
The Chilean force occupied Lima at the end of October 1838 but 



282 



Two naval guards 
at the monument 
to the War of the Pacific 
in front of the Naval 
Headquarters, Valparaiso 
Courtesy David Shelton 




abandoned it on November 3 on hearing of the approach of a large 
Bolivian army under General Santa Cruz. The Chileans withdrew 
by land and sea toward Huacho. However, Santa Cruz failed to 
exploit the Chilean retreat fully, despite successes in several small 
skirmishes culminating in a major Chilean reverse at Bum on Janu- 
ary 6, 1839. 

The resounding defeat of the Peruvian fleet at Casma by a smaller 
Chilean squadron under British admiral Roberto Simpson, on Janu- 
ary 12, left Chile in absolute control of the southeastern Pacific. 
General Bulnes again assumed the initiative. After inflicting a crush- 
ing defeat on the Bolivian Army at Yungay on January 20, the 
Chileans commenced a second push southward, occupying Lima 
for the second time in April. Santa Cruz had already fled to Ec- 
uador, and both the war and the short-lived Peru-Bolivia Confeder- 
ation now came to an end. 

After 1843, when Bulnes was president (1841-51), the Chilean 
Army concentrated on penetrating the area south of the Rio Bio- 
Bfo, still largely the domain of the Araucanian people. In response, 
the Araucanians rose in a bloody revolt, which was suppressed in 
1859-61, although the southern portion of the country remained 
largely outside the control of the national government. 

In 1865, in a last attempt to reconquer their lost South Ameri- 
can colonies, the Spaniards blockaded Chilean and Peruvian ports, 
an action that led to war between Spain and an ad hoc alliance 



283 



Chile: A Country Study 



of Chile, Bolivia, Peru, and Ecuador. Hostilities were confined to 
the sea. Although twenty-six years of freedom from external threat 
had once again seen the decline of the Chilean Navy, the blockade 
was effectively broken by the naval victory of the allied fleet, un- 
der the Chilean admiral Juan Williams Rebolledo, at Papudo on 
September 17, 1866. The naval war with Spain ended shortly af- 
terward. 

War of the Pacific, 1879-83 

Despite cooperation among Chile, Peru, and Bolivia in the war 
against Spain, friction began to develop over the mineral-rich Boliv- 
ian province of Antofagasta and the Peruvian provinces of Tarapa- 
ca, Tacna, and Arica, whose wealth was exploited largely by 
Chilean enterprises. In 1875 Peru seized Chilean nitrate mines in 
Tarapaca, and in 1878 a new Bolivian government greatiy increased 
taxes on Chilean business interests. To protect these interests and 
preempt their threatened expropriation, Chile dispatched a naval 
squadron headed by the ironclad Blanco Encalada and landed 200 
troops at the Bolivian port of Antofagasta on February 14, 1879, 
provoking a declaration of war by Bolivia on March 1 , an action 
reciprocated by Chile on April 5. Peru, which had concluded the 
secret Treaty of Mutual Defense with Bolivia in 1873, was now 
also drawn into the conflict (see The Liberal Era, 1861-91, ch. 1). 

The Bolivian Army, with 2,361 members and generally anti- 
quated equipment, and the Peruvian Army, with 5,241 members 
and a mixture of modern and older equipment, opposed the com- 
paratively well-equipped Chilean Army of 2,845 officers and en- 
listed personnel. The Chilean Navy, still under the command of 
Admiral Williams, had two new ironclads (the Blanco Encalada and 
the Cochrane), four unarmored steam corvettes, and two gunboats. 
These vessels faced a Peruvian force consisting of an ironclad frigate, 
a small ironclad turret ship, two monitors, an unarmored steam 
corvette, and a gunboat. 

Neither Chile, Peru, nor Bolivia was prepared for war. While 
they were mobilizing their land forces, any major actions were con- 
fined to encounters between the Chilean and Peruvian navies. 
Bolivia lost its three warships and four Pacific Coast ports early 
in the war. The naval war commenced with simultaneous bom- 
bardments of Pisagua and Mollendo by the Chilean fleet, followed 
by blockades of Callao and Iquique. 

The Chilean expeditionary force at Antofagasta, reinforced to 
a strength of 1,400, occupied the ports of Cobija, Tocopilla, and 
Mejillones, penetrating inland against weak resistance as far as 
Calama. No further major land actions occurred for the next five 



284 



National Security 



months. However, by the middle of May 1879 Bolivia and Peru, 
having expanded their ranks with mostly peasant conscripts, had 
concentrated 9,000 men at Tarapaca, 4,000 at Tacna, and an ad- 
ditional 7,000 in the vicinity of Arica. 

Peru gained a Pyrrhic victory in the first naval action of the war. 
Its most powerful ships, the ironclad frigate Independencia and the 
turret ship Hudscar, closed in on the two Chilean ships blockading 
Iquique on May 21 , 1879. The Peruvians broke the blockade, sink- 
ing the Chilean corvette Esmeralda as her captain, Arturo Prat Cha- 
con, led a boarding party of the Hudscar in a heroic but futile act. 
However, the Independencia hit a reef and sank as it was pursuing 
the fleeing Chilean gunboat Covadonga, which had sought refuge 
in shallow waters. Despite the loss of its largest unit, the Peruvian 
fleet remained a great menace, mainly owing to the audacity and 
genius of Admiral Miguel Grau. Flying his flag on the Hudscar, 
which, together with the corvette Union, broke through the Chilean 
blockade of Callao on three occasions, Grau wreaked havoc on 
Chilean shipping. 

Chilean naval energies were now largely directed toward the 
elimination of these two Peruvian ships. On October 8, 1879, 
Grau's luck ran out when he skirmished with two Chilean flotillas 
off Punta Angamos. The Hudscar was captured after the heroic ad- 
miral was killed, although the Union escaped. The following month, 
the Peruvians suffered another major setback when the gunboat 
Pilcomayo, operating as a commerce raider, was sunk by the 
Chileans. Chilean naval supremacy was now complete. The sur- 
viving major units of the Peruvian Navy remained blockaded at 
Callao and Arica, and any naval action was limited to the minor 
units of both fleets. These consisted mainly of torpedo boats, of 
which Chile acquired a total of twelve and Peru three during 
1880-81. 

Major land operations commenced at the end of October 1879 
with the amphibious landing of more than 10,000 Chilean troops 
at Pisagua on what is now the Peruvian coast. After a resolute 
defense by its small Bolivian garrison, Pisagua was captured on 
November 2. The Chileans advanced rapidly southward from this 
beachhead. On November 19, a Chilean force of 6,000 defeated 
a Confederation force of 9,000 at Pozo Dolores, north of Iquique. 
As a result of this reverse, the Peruvians abandoned Iquique without 
a fight. The garrison joined the survivors of the Battle of Pozo 
Dolores at Tarapaca, where a total Confederation army of 5,000 
assembled. Although a reconnaissance force of 2,000 Chileans was 
routed on November 27, the victorious Confederation forces failed 
to pursue their advantage, abandoning Tarapaca and retreating to 



285 



Chile: A Country Study 

Tacna. The Chileans, now reinforced to 17,000, continued to ad- 
vance toward Tacna and Arica. A Chilean force of 5,000 carried 
out an amphibious raid at Ilo, to the north of Tacna, on Decem- 
ber 31 , and withdrew after capturing and sacking Moquegua, the 
ruins of which were soon reoccupied by the Peruvians. 

Another Chilean amphibious landing established a beachhead 
at Ilo on February 25, 1880. During the first weeks of March, most 
of the Chilean forces disembarked. On March 13, a force of about 
10,000 men carried out another major landing, at Pacocha, and 
an additional 3,000 landed at Vftar on March 14. On March 22, 
these forces, under General Manuel Baquedano Gonzalez, pushed 
through the defenses at Moquegua and scored a crushing victory 
over 2,000 Peruvians at Torata. The Chilean forces now split for 
a two-pronged attack on Tacna to the south. 

A combination of difficult terrain and the constant harassment 
by Peruvian guerrillas delayed the Chilean advance. It was not until 
May 26 that Baquedano 's forces encountered a combined force of 
10,000, which the Confederation had concentrated at Alto de la 
Alianza, north of Tacna. Baquedano scored another spectacular 
victory, which split the Bolivian and Peruvian armies; the former 
retired toward the Altiplano (Bolivia's high plateau), and the lat- 
ter retreated in the direction of Arequipa. Following this disaster, 
the Bolivians took no further significant part in operations. 

Chilean pressure was now concentrated on Arica, whose 
2,000-man garrison surrendered on June 7, 1880. Another lull in 
major land operations now occurred as the Chileans prepared for 
the final advance on Lima. At sea several minor Chilean vessels, 
engaged in the blockade of Callao, fell victim either to shore bat- 
teries or to the occasional sallies of Peruvian torpedo boats and 
armed launches. 

By November the Chileans had concentrated 25,000 men at 
Arica. Reembarking on November 14, this force made an amphibi- 
ous landing four days later and captured Pisco. During the fol- 
lowing weeks, a series of other amphibious landings allowed the 
Chileans to close in on Lima. On January 13, 1881, a Chilean force 
under General Baquedano scored a decisive if costly victory at Cho- 
rrillos, south of Lima. Two days later, the Peruvians broke an ar- 
mistice, negotiated under the auspices of the foreign diplomatic 
corps in Lima. The ensuing Battle of Miraflores resulted in the 
total rout of the Peruvians and the collapse of their army. Peru's 
president and his High Command fled into the interior. Lima it- 
self surrendered to the Chileans on January 16, and Callao fell the 
next day. The Chilean victory was now effectively complete, 
although guerrilla warfare was to continue another two years. 



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National Security 



Chile's imaginative combination of land and sea power in the war 
against Peru and Bolivia had introduced a highly mobile form of 
amphibious warfare that was without precedent in South America. 

Before the victorious Chilean Army was demobilized, it was 
turned to the pacification of the Araucanians, who had terrorized 
the southern frontier after the depletion of the regular army garri- 
sons during the war. By the mid- 1880s, the authority of the Chilean 
government was established throughout the national territory. Chile 
had now emerged as the major military and naval power in Latin 
America, with a battle-hardened army and an impressive fleet of 
three ironclads, three cruising vessels, one gunboat, and ten torpedo 
boats. Its navy outranked all other Latin American navies, as well 
as the United States Navy, in terms of modern and effective sea- 
going warships. Thanks to its navy, Chile incorporated Easter Is- 
land (Isla de Pascua) into its national territory in 1888. 

Development of the Armed Forces 

French influence was perceptible in the Chilean Army from the 
mid-nineteenth century up to the War of the Pacific. However, 
following the defeat of France in the Franco-Prussian War of 
1870-71, admiration of Prussian military institutions grew. This 
led to the appointment in 1885 of a German, Captain Emil Korner, 
who had fought with distinction against France, to reorganize the 
Chilean military instruction system. On beginning his duties in 
1886, Korner reorganized the General Bernardo O'Higgins Mili- 
tary Academy, inaugurated a staff school (the War Academy), and 
quickly consolidated the growing German influence in the Chilean 
Army. 

When most of the army sided with the winning congressional 
forces (Congresionalistas) in the Civil War of 1891, Korner acted 
as chief of the General Staff and was largely credited with the victo- 
ries of the army. In that war, the majority of the navy also suppor- 
ted the congressional faction. However, the new torpedo gunboats, 
the Lynch and the Condell (the only major naval units that support- 
ed the president), scored a spectacular victory when they attacked 
and sank the flagship of the congressional fleet, the ironclad Blanco 
Encalada, in Valparaiso harbor on the night of April 23. 

After the Civil War, Korner, now a general, was joined by thirty- 
six other German instructors and was confirmed as chief of staff 
of the army, a position he held until 1910. German instructors or- 
ganized the army into four divisions and developed the General 
Staff. German reforms also included establishment of the Noncom- 
missioned Officers' School (Escuela de Suboficiales y Clases) and 
other military schools. 



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Chile; A Country Study 

The expansion of the navy continued in the decade following 
the Civil War, under the added impetus of an increasingly bitter 
boundary dispute with Argentina. The danger of war was defused 
as both countries agreed to mediation by King Edward VII of Brit- 
ain. The mediation resulted in the General Arbitration Treaty of 
1902, under which all subsequent territorial disputes with Argen- 
tina were settled until the late 1970s. 

Chile's military aviation was officially inaugurated in February 
1913 with the creation of the army's Captain Avalos Prado Mili- 
tary Aviation School (Escuela de Aeronautica Militar "Capitan 
Avalos Prado" — EAM) at El Bosque, outside Santiago. In 1915 
aircraft participated in the annual military maneuvers for the first 
time. The shortage of aircraft caused by World War I severely 
impeded the development of Chilean military aviation. With the 
end of the war in 1918, a dozen British fighter monoplanes were 
obtained to equip the First Aviation Company. As early as 1916, 
naval officers had also undertaken flight training at the EAM. The 
end of the war in Europe permitted the formation of the Naval 
Aviation Service (Servicio de Aviacion Naval). 

In 1921 the Chilean government contracted for the services of 
a British naval and air mission. The EAM was also reorganized, 
and additional aircraft were acquired. In 1924 a German air mis- 
sion arrived and was entrusted primarily with the development of 
civil aviation. It was precluded from overt involvement in the de- 
velopment of the Chilean military and naval air arms by the Treaty 
of Versailles. 

The military and naval air services were merged as the Chilean 
Air Force (Fuerza Aerea de Chile— FACh) on March 21, 1930, 
thereby becoming the world's fourth independent military air arm. 
The formation of the FACh coincided with a growing economic 
crisis that necessitated cutbacks in the armed forces, severe cur- 
tailment of procurements, and a steady attrition of fielded materiel. 
Demoralized as a result of pay reductions and the political chaos 
then rampant in the country because of the Great Depression (see 
Glossary), the Chilean Navy staged a work stoppage from August 
to November 1931 . The mutiny finally collapsed after the air force 
bombed the fleet. Although little physical damage was done, this 
event significantly affected naval morale and the subsequent de- 
velopment of the navy by demonstrating the vulnerability of war- 
ships to air attack. 

In the early 1930s, during the Great Depression, the army was 
reduced from four to three divisions, and its troop strength was 
reduced to 12,000. An improvement in the economic situation in 



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National Security 



the mid- 1930s, however, permitted an expansion back to four di- 
visions. 

Chile remained officially neutral during most of World War II, 
although it sold its copper at a fixed price only to the United States; 
however, a perfunctory declaration of war on the Axis Powers was 
made in February 1945. As was the case for most other neutral 
armed forces, the war years were lean ones for the Chilean mili- 
tary, which was forced to rely on its own resources for the main- 
tenance of increasingly obsolete materiel. 

Despite Germany's defeat in the two world wars, German in- 
fluence remained stronger in the Chilean Armed Forces as a whole 
than in those of any other Latin American country. However, the 
navy — founded largely by British, Irish, and North American 
mercenaries and commanded in its formative years by Thomas 
Cochrane, one of the most brilliant British naval officers of the 
day — preferred to model itself on the British Royal Navy. In the 
early 1990s, the Chilean Navy continued to show a strong British 
influence, which had been reinforced by British training missions 
until the eve of World War II. The navy, not immune to the Ger- 
man influences at work on the army for more than half a century, 
achieved a synthesis of the better elements of the Prussian mili- 
tary and British naval traditions. Yet the navy did not lose its es- 
sentially British orientation, underlined in its repeated return to 
British shipyards for new materiel. As in the case of the army, the 
influence of United States naval missions has been largely confined 
to the areas of tactical and operational doctrine. 

The FACh also owed its early independent existence to the ac- 
tivities of British training missions during the 1920s. Like the 
Chilean Navy, the FACh retained certain Prussian influences, 
deriving mostly from the military and naval air services from which 
it had been formed. However, the FACh probably has been the 
most receptive of Chile's uniformed services to United States in- 
fluence. A succession of United States air-training missions began 
in the early 1940s. 

Chile has exercised a strong formative influence on the armed 
forces of other Latin American countries. The armed forces of 
Colombia, Ecuador, Venezuela, and El Salvador have come un- 
der the tutelage of Chilean military missions, in some cases for 
lengthy periods. Many of the smaller republics, including Nicaragua 
and Paraguay, have sent officer personnel for postgraduate train- 
ing in Chilean military schools. The navy also has exerted con- 
siderable influence on the Colombian and Ecuadorian navies. The 
Ecuadorian Navy was effectively established under Chilean guid- 
ance and has continued a long-standing arrangement whereby 



289 



Chile: A Country Study 

Ecuadorian naval cadets have received part of their training in 
Chile. 

Growth of United States Influence 

Beginning in the 1940s, United States military missions have 
imparted certain tactical doctrinal concepts. However, they diluted 
the original German influence to a markedly lesser degree than 
elsewhere in the region. In 1941 , following the entry of the United 
States into World War II, a United States air mission was estab- 
lished in Chile and charged with reorganizing the FACh. In 1944 
significant quantities of equipment for the army and air force, in- 
cluding 230 aircraft procured under the Lend-Lease Agreement, 
the legal apparatus for military equipment transfers during World 
War II, began to arrive in exchange for the availability of Chilean 
bases to the United States. However, Chile received no materiel 
assistance from the United States during the war period because 
the Chilean Navy had refused to sell the 28,000-ton battleship 
Latorre, the six destroyers of the Serrano class, and the submarine 
depot ship Araucano to the United States Navy following the Japanese 
attack on Pearl Harbor. Chile received only some coastal artillery 
equipment for the defense of the copper-mining zone, whose prod- 
ucts were considered vital to the Allied war effort. 

Following the conclusion of World War II, and with the signing 
of the Inter-American Treaty of Reciprocal Assistance of 1947 (Rio 
Treaty — see Glossary), additional United States materiel was also 
acquired by the army and air force. This time, acquisitions were 
also made by the navy. The formation of an amphibious warfare 
force equipped with United States war-surplus gear stimulated ex- 
pansion and reorganization of the Coast Artillery (Artilleria de Cos- 
tas), which had been subordinate to the navy since 1904. The name 
of the organization was changed from Coast Artillery to the Navy 
Infantry Corps (Cuerpo de Infanteria de la Marina — CIM), a 
reflection of the newly dominant role of the CIM's marine mis- 
sion. Naval aviation was revived in 1953. Initially equipped with 
a few light transports and helicopters, the naval air force operated 
from a new naval air base at El Belloto, Valparaiso. In 1958 a group 
of frogmen commandos, modeled after the United States Navy 
SEALs (sea-air-land team), was also formed. 

Postwar expansion of the army also brought some organizational 
changes. The Magallanes military district was raised to the status 
of a full Military Area {area militar — AM); its garrison was expanded 
into the army's Fifth Division. The Sixth Division was later es- 
tablished in the region adjoining the Bolivian and Peruvian bord- 
ers; it also acquired the status of an AM. In 1965 the army formed 



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National Security 



a paratroop/special forces battalion, and in 1970 it regained its own 
aviation arm with the establishment of the Army Aviation Com- 
mand (Comando de Aviacion del Ejercito — CAE). The CAE was 
initially equipped with a few light communications and observa- 
tion aircraft transferred from the air force. The Seventh Brigade, 
raised in the southern part of AM 4 during the tension with Ar- 
gentina over the Beagle Channel in the late 1970s and early 1980s, 
was raised to divisional status in 1990. This brought the total num- 
ber of AMs and divisions to seven. 

Repression and Human Rights Violations 

In the immediate aftermath of the 1973 coup, there was exten- 
sive repression, including summary executions of prisoners. Dur- 
ing this period, the number of people who were detained so exceeded 
the capacities of the existing penal institutions that for a time stadi- 
ums, military grounds, and naval vessels were used as short-term 
prisons. Subsequently, at least five prison camps were established 
for political prisoners, mostly in the remote south and the far north. 
The intelligence service that was created after the coup, the Na- 
tional Intelligence Directorate (Direccion Nacional de Inteli- 
gencia — DIN A), also kept secret detention centers, where torture 
of prisoners was a routine practice. All of these places of detention 
had been closed down by the time of the return to civilian govern- 
ment in 1990. 

During the four-and-one-half years following the 1973 coup, 
Chile was officially in a state of siege (see Glossary under state of 
exception) and functioned under martial law. The military tribunals 
expanded their jurisdictions to include all violations (including those 
perpetrated by civilians) of the much more encompassing security 
laws enacted by the government. At the end of this period, the state 
of siege was replaced by a state of emergency, which restored a 
larger degree of authority to the civilian courts, although military 
tribunals continued to deal with cases involving public security. 

The Aylwin government reestablished the competence of the 
civilian courts to deal with all matters pertaining to civilians. It 
therefore opened the way for these courts to reexamine cases of 
human rights violations that had been previously dismissed by the 
military tribunals as lacking in evidence or as falling under the am- 
nesty law approved by the military government in 1978. It enact- 
ed a significant constitutional amendment that reduces the power 
of military courts only to that of trying offenses committed by mili- 
tary personnel acting in the line of duty or on military bases. Mili- 
tary courts can no longer try civilians. 



291 



Chile: A Country Study 

The Aylwin government also established the National Commis- 
sion on Truth and Reconciliation, or Rettig Commission, to in- 
quire into human rights abuses during the 1973-90 period of 
military rule. It eventually produced a voluminous report holding 
the security forces responsible for 2,115 deaths, including those of 
957 detainees who disappeared and an additional 164 victims of 
political violence. 

The military's reputation for apolitical professionalism was tar- 
nished by the 1973 military coup and subsequent repression. A 
national survey conducted in March 1991 by the Center for Con- 
temporary Reality Studies (Centro de Estudios de la Realidad 
Contemporanea — CERC), after the release of the Rettig Commis- 
sion report, showed that 75.3 percent of the population assigned 
"much" blame to the military for violations of human rights. 
Another 14.4 percent thought the armed forces had at least "some" 
responsibility, and only 3.8 percent thought they had "none." 

An amnesty law has protected military officers involved in hu- 
man rights abuses committed between 1973 and 1978. However, 
by 1993 as many as 600 officers, mainly from the army, had been 
cited in 230 cases involving rights abuses. The numerous calls from 
civilian courts for military officers to testify regarding cases of dis- 
appearances that occurred during the military government, the de- 
cision of an independent state office that oversees cases of corruption 
to investigate the circumstances under which the army paid General 
Pinochet's sons about US$3 million for his interest in a bankrupt 
firm that manufactured arms, and certain delays of the Ministry 
of Defense in issuing decrees demanded by the army for the pro- 
motion of its officers led to a highly visible demonstration (boinazo) 
by the army in Santiago on May 28, 1993. About sixty heavily 
armed officers and elite troops in full battle dress mobilized to guard 
a meeting of the Corps of Army Generals, themselves in batde dress, 
in the armed forces building across the street from La Moneda, 
the presidential palace. The president was on an official trip to Eu- 
rope, and the minister of interior, in charge of the government as 
vice president, thought that the events were so critical that they 
could well lead to a military coup. On his return to the country, 
President Aylwin initiated an intensive round of consultations with 
General Pinochet, political parties, and human rights groups, but 
he reaffirmed his unwillingness to back the enactment of a blanket 
amnesty law, such as the one approved in Uruguay. Instead, he 
sponsored a law that would expand the number of special civilian 
court judges examining the cases of the disappeared and permit 
the officers summoned to testify to do so in secret without their 
names appearing in the press. This proposed law was, however, 



292 



General Augusto 
Pinochet Ugarte, 
chief of state, 1973-90 
Courtesy Embassy of Chile, 
Washington, and 
El Mercurio, Santiago 



President Augusto 
Pinochet Ugarte 
reviewing troops at 
the 19th of September 
Armed Forces Day 
parade in Santiago 
in 1985 
Courtesy David Shelton 



Chile: A Country Study 

rejected by the National Congress (hereafter, Congress), and there- 
fore no changes resulted from the demonstration of May 28. 

Civil-Military Relations 

After the boinazo of May 1993, the international press often 
referred to the Aylwin administration as a co- government, in which 
the military and civilians shared power equally. According to this 
view, Chile's democracy was emasculated, with a president un- 
able to resist the military and with a Congress acting as a rubber- 
stamp body. This view seemed to be supported by the fact that 
President Aylwin lacked the power to appoint, promote, and dis- 
miss officers. The president cannot appoint or fire the commanders 
in chief of each service. Furthermore, military officers seem to be 
immune to prosecution for human rights abuses. In fact, the no- 
tion of " co- government" is simplistic and fails to explain some of 
the limited yet significant developments under the Aylwin govern- 
ment. In 1993 Genaro Arriagada, a leader within the Christian 
Democratic Party (Partido Democrata Cristiano — PDC), referred 
to a civil-military opposition to Aylwin' s policies. This suggests 
that the confrontation is not merely one between the military and 
civilians. Whereas the ruling center-left coalition known as the Coa- 
lition of Parties for Democracy (Concertacion de Partidos por la 
Democracia — CPD) held an advantage in the Chamber of Deputies 
(seventy to forty-nine), the military was protected by a majority 
in the Senate, thanks to the electoral engineering of the Pinochet 
regime that provided for nine designated senators. Without the 
designated senators, the CPD would have had a majority in the 
Senate (twenty- two to sixteen) from 1989 until March 1994. The 
designated senators, appointed by Pinochet, gave the right-wing 
opposition a three-seat advantage in the Senate (after 1991, only 
a two-seat advantage, with the death of a designated senator). 

The Aylwin administration was willing to raise issues in civil- 
military relations even when it was clear that it would not win. 
In mid- 1992 the Aylwin government proposed a series of constitu- 
tional reforms that would have limited the prerogatives of the mili- 
tary by allowing the president to appoint, promote, and remove 
officers. In addition, the president would have the power to ap- 
point and remove the commanders in chief of the armed forces, 
although this would not apply to the current commanders. The 
reforms were opposed by the National Renewal (Renovation Na- 
tional) and the Independent Democratic Union (Union Democrata 
Independiente — UDI), which suffered electoral setbacks in the June 
23, 1992, municipal elections and were afraid of further losses. The 
army also opposed the reforms in a leaked paper published by La 



294 



National Security 



Tercera de la Hora, a leading daily. In the prosecution of military 
officers for human rights abuses, an unusual coalition between the 
right and left derailed an initiative by the Aylwin government to 
complete the process. 

Unable to successfully carry out major constitutional reforms in 
relation to the military, the Aylwin administration exercised its 
power in other ways. The Chilean president can veto the promo- 
tions of military officers, and in late 1993 Aylwin adroitly used the 
threat of the veto to influence the matter of when Pinochet would 
step down as army commander in chief. 

The Ministry of Defense lacks the power to initiate actions, but 
it can selectively stall army initiatives through administrative in- 
action. It deliberately delayed the signing of decrees on postings 
and promotions, in addition to the sale of armaments — one of the 
major causes of the May 1993 boinazo. 

The co- government argument also fails to take into considera- 
tion the effects of time. As Eduardo Frei Ruiz-Tagle prepared to 
take office as president on March 1 1 , 1994, the political right was 
becoming less protective of the military and the political system 
it had created. The largest right-wing party, the National Renew- 
al, showed signs that it was willing to consider amendments limit- 
ing the military's prerogatives, especially after the army was 
involved in telephone-tapping conversations of National Renewal 
members in 1992. Even the extreme right-wing UDI showed signs 
that it was weary of some of the features of the military-sponsored 
system, such as the binomial electoral system (see Glossary), which 
hurt the party in the December 1993 elections. 

Mission and Organization of the Armed Forces 
Mission 

The 1980 constitution, prepared and enacted by the military 
government, states that the armed forces "exist for the defense of 
the fatherland, are essential for national security, and guarantee the 
institutional order of the Republic" (Article 90). The military is 
capable of carrying out its responsibility to deter any probable ene- 
my or group of enemies. As in most other Latin American coun- 
tries, the role as guarantor of national security and institutional 
order is deemed to extend to the defense of national institutions 
against internal as well as external threats. These have been con- 
troversial notions, but the Aylwin government was unable to clar- 
ify the role of the military or to assert the principle of presidential 
control over the military. 

The 1980 constitution and the Organic Constitutional Law of 



295 



Chile: A Country Study 



the Armed Forces (Law 18,948 of February 1990) that was enact- 
ed at the end of the military government expanded the military's 
autonomy from the president and gave it a voice over national af- 
fairs through its participation in the newly created National Secu- 
rity Council (Consejo de Seguridad Nacional — Cosena). Presided 
over by the president of the republic, Cosena includes the presi- 
dents of the Senate and the Supreme Court, the commanders in 
chief of the armed forces, and the director general of the Carabineros 
of Chile (Carabineros de Chile), a national police force with a 
paramilitary organization (see The Security Forces, this ch.). The 
constitutional reforms approved in July 1989 added the comptroller 
general (contralona general) to Cosena, bringing the total number 
of voting members on it to eight. Also participating as members, 
but without the right to vote, are the ministers of defense; econo- 
my, development, and reconstruction; finance; foreign relations; 
and interior. Cosena also selects four former military commanders 
in chief (one from each service) as designated senators and two of 
seven judges of the powerful Constitutional Tribunal (Tribunal 
Constitucional). After the 1989 constitutional reform, Cosena was 
given the power to represent (representar) its views on any matter 
that it deemed appropriate to the president, Congress, or the Con- 
stitutional Tribunal; to give its consent to the president to remove 
a top military commander (and thus a member of Cosena); and 
to ask any government agency for information on security matters. 

In 1992 and early 1993, the Aylwin government presented con- 
stitutional reform legislation to Congress in order to reinstitute the 
president's right to remove military officers, including the heads 
of the services, at the chief executive's discretion (only Cosena has 
that right). Another set of proposed reforms presented in 1993 also 
would have eliminated the designated senators and revamped the 
composition of Cosena by adding the president of the Chamber 
of Deputies (the lower house of Congress) to it (thereby creating 
a civilian majority on it), and it would have changed the Constitu- 
tional Tribunal by composing it of members chosen mainly by the 
president and the Senate. However, the Aylwin government lacked 
the congressional majorities needed to enact these reforms. As a 
result, these changes were not instituted (see The Autonomous Pow- 
ers, ch. 4). 

Command Structure 

Under the 1925 and 1980 constitutions, the president is the head 
of the armed forces, with the ability to order the disposition of the 
air, sea, and land forces with the advice of the military commanders. 
In case of war, the president may declare war and assume the 



296 



National Security 



supreme military command of troops directly. The minister of 
defense, assisted by the subsecretaries of defense for the army, navy, 
and air force, is responsible for the armed forces' administrative 
control (see fig. 13). However, since the transition to civilian govern- 
ment in 1990 the president has had little actual control over the 
military, and the Ministry of Defense has lacked any effective con- 
trol of the services and the Carabineros. 

The chief executive appoints, for four-year terms, commanders 
in chief of the army, navy, and air force and the director general 
of the Carabineros "from among the five senior generals who have 
the qualifications required as per the respective constitutional stat- 
utes for such posts" (Article 93). However, the president may not 
remove any of these appointees from their posts during their four- 
year terms, unless there are proven criminal charges against them, 
in which case Cosena must approve the president's disciplinary ac- 
tion. The president, through the minister of defense, prepares all 
decrees giving officers of the armed forces and Carabineros their 
promotions. To remove an officer, the president must refuse the 
officer's promotion, after the candidate has spent a maximum num- 
ber of years in the current grade. Officer assignments and qualifi- 
cations are made by the military command in accordance with the 
law and regulations of each service. The army commander, General 
Pinochet, has resisted all executive branch attempts to amend the 
constitutional article that prevents the president of the republic from 
removing the armed forces' commander in chief. 

Although the positions of the minister of defense and the sub- 
secretaries remained effectively unchanged under the Aylwin 
government, the Subsecretariat of the Carabineros and the Sub- 
secretariat of Investigations are subordinate to the minister of 
defense rather than to the minister of interior, as was formerly the 
case. However, new laws call for the Ministry of Interior to coor- 
dinate the actions of the security forces. The Southern Military 
Region (Region Militar Austral), including the two provinces of 
Magallanes and the Chilean Antarctic Territory (Territorio Chil- 
eno Antartico), are also directly subordinate to the Ministry of 
Defense. 

In addition to Cosena, two other bodies, whose functions are 
specifically limited to the advisory level, deal with matters of na- 
tional defense and security: the Politico-Strategic Advisory Coun- 
cil (Consejo Asesor Polftico-Estrategico — CAPE) and the Internal 
Security Advisory Council (Consejo Asesor de Seguridad Interior — 
CASI). CAPE consists of six military and four civilian members 
and is entrusted with long-range planning of the defense and ex- 
ternal security of the state. CASI, which consists of the minister 



297 



Chile: A Country Study 



MINISTRY OF DEFENSE 



MINISTRY OF INTERIOR 







NATIONAL 
DEFENSE 














STAFF 







AIR FORCE 



SOUTHERN 
MILITARY 
REGION 



CARABINEROS 



INVESTIGATIONS 
POLICE 



SUBSECRETARIAT OF 
THE ARMY 



SUBSECRETARIAT OF 
THE NAVY 



SUBSECRETARIAT OF 
THE AIR FORCE 




SUBSECRETARIAT OF 
THE CARABINEROS 




SUBSECRETARIAT OF 
INVESTIGATIONS 













Administrative control 
Operational contrrol 



Figure 13. Organization of the Armed Forces and Security Forces, 1993 



298 



National Security 



of interior and seven military members, deals with internal secu- 
rity planning. 

A combined National Defense Staff (Estado Mayor de la Defensa 
Nacional — EMDN) is also largely an advisory body. The position 
of chief of the EMDN rotates biennially among the army, navy, 
and air force. Each of the armed forces also maintains its own 
General Staff (Estado Mayor General), which carries out standard 
general-staff functions with regard to its own service. 

The more recently established Supreme Command of the Armed 
Forces (Comando Supremo de las Fuerzas Armadas — CSFA) is 
primarily a coordinating body, concerned with introducing the max- 
imum possible degree of standardization in procurement policies 
and the elimination of duplication of effort at the administrative 
level. It largely superseded the Council of Commanders in Chief 
(Junta de Comandantes en Jefe). The latter entity, established in 
the late 1950s but nonoperational under the military regime, con- 
sisted of the three commanders in chief of the armed forces, together 
with the chief of the EMDN. 

Army 

The Chilean Army has long enjoyed a reputation as a credita- 
ble military force. Although it had not fought a war against a for- 
eign enemy since the War of the Pacific, the army is still well 
regarded by armed forces throughout Latin America. However, 
it has been the most backward of the three services, having fallen 
behind the navy and FACh in the modernization process. Neverthe- 
less, in 1993-94 the army was undertaking modernization mea- 
sures, including the replacement of its old armored vehicles with 
French AMX-30 or German Leopard- 1 tanks. 

The army divides the country into seven military areas (AMs) 
headquartered in Antofagasta, Santiago, Concepcion, Valdivia, 
Punta Arenas, Iquique, and Coihaique. AM 1 (Antofagasta) em- 
braces the province of Antofagasta and Atacama Region. AM 2 
(Santiago) includes the capital and the provinces of San Felipe de 
Aconcagua, Colchagua, and Valparaiso, as well as Libertador 
General Bernardo O'Higgins Region and Coquimbo Region. AM 
3 (Concepcion) encompasses the provinces of Bfo-Bfo, Concepcion, 
Curico, Linares, Malleco, Nuble, and Talca, as well as Maule 
Region. AM 4 (Valdivia) contains the provinces of Cautin, Llan- 
quihue, and Valdivia. AM 5 (Punta Arenas) shares its borders with 
Magallanes Province. AM 6 (Iquique) consists of Tarapaca Region. 
AM 7 (Coihaique) encompasses the provinces of Aisen and Chiloe. 

In 1993 the army totaled about 54,000 personnel, including 
27,000 conscripts. It is organized into seven divisions — one for each 



299 



Chile: A Country Study 



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300 



National Security 



of the seven AMs (see fig. 14). Five of the divisions are grouped 
under two army corps headquarters. The First Corps, based in Iqui- 
que, comprises the First Division and the Sixth Division. The Sec- 
ond Corps, headquartered in Punta Arenas, controls the Fourth 
Division, the Fifth Division and the Seventh Division. In the ear- 
ly 1990s, it appeared that the Second Division and the Third Di- 
vision might ultimately be grouped under a third corps headquarters 
in keeping with the strategic doctrine developed during the 1970s, 
which envisaged the formation of the army into three divisions of 
varying sizes in time of war. 

The composition of the divisions has varied considerably. The 
Second Division and the Third Division have between two and three 
times the strength of the other five. Each division essentially in- 
corporates an artillery regiment and a regiment or battalion each 
of engineers, signals, and logistic troops, plus a variable number 
of infantry and mechanized cavalry units. 

The First Division, headquartered in Antofagasta, includes a 
commando battalion and adds three motorized infantry regiments 
and one armored cavalry regiment, plus an antitank guided-weapon 
(ATGW) company to the basic elements. The Second Division, 
based in Santiago, adds three motorized regiments and five moun- 
tain infantry regiments, an armored cavalry regiment, and a motor- 
cycle reconnaissance group to its basic support units. The Third 
Division, headquartered in Concepcion, includes two infantry 
regiments, three mountain regiments, and two armored cavalry 
regiments. The Fourth Division, based in Valdivia, includes a com- 
mando battalion and adds two infantry regiments, one mountain 
regiment, and two armored cavalry regiments, plus a tank battal- 
ion to its basic support units. The Fifth Division, headquartered 
in Punta Arenas, also includes a commando battalion, plus two 
infantry regiments, two armored cavalry regiments, and an anti- 
tank battalion. The Sixth Division, based in Iquique, has a full 
commando regiment, plus two infantry regiments, one mountain 
regiment, and two armored cavalry regiments. The Seventh Divi- 
sion, based in Coihaique, was raised from brigade status in 1990 
and comprises an infantry regiment, a reinforced mountain infantry 
regiment, a commando company, a horsed cavalry group, a motor- 
cycle reconnaissance squadron, an artillery regiment, an aviation 
section, an engineer company, and a logistics battalion. It was 
scheduled to acquire a tank battalion from the Fourth Division. 

Army troops include an army headquarters battalion, an avia- 
tion regiment, engineer and signals regiments, and a transport bat- 
talion. Each infantry regiment contains one to four battalions. Eight 
of the battalions are designated as reinforced (reforzado) because they 



301 



Chile: A Country Study 

have additional attached combat and logistic support elements to 
enable them to function as semi-independent combat teams. 

The difficulty in acquiring materiel during the period of inter- 
national ostracism that followed the 1973 coup resulted in an ex- 
tremely varied equipment inventory likely to cause considerable 
logistical problems (see table 43, Appendix). In 1993 the army's 
aviation regiment, created in 1970, operated 111 aircraft. Each 
major army unit had a close defense antiaircraft artillery section. 

Navy 

Chile's long coast contributed to the development of a distin- 
guished maritime tradition. The Chilean Navy accordingly has en- 
joyed an unusual primacy among the nation's armed forces, despite 
the army's formal status as the senior service. From its earliest days, 
the navy has operated under strong British influence. 

The navy, with a strength of 25,000 — including conscripts and 
the Navy Infantry Corps (Marines), Naval Aviation, and Coast 
Guard) — divides the long Chilean coastline into four naval zones, 
headquartered in Iquique, Punta Arenas, Talcahuano, and Val- 
paraiso (see fig. 15). The First Naval Zone (Valparaiso) corresponds 
approximately to the coastal portions of AM 1 and AM 2 and con- 
tains most of the training establishments. These include the Ar- 
turo Prat Naval School, the Hydrographic Institute (Instituto 
Hidrografico), the Naval War Academy (Academia de Guerra 
Naval), and the Supplies and Services School (Escuela de Abasteci- 
mientos y Servicios), all in Valparaiso, as well as the School of Oper- 
ations (Escuela de Operaciones), the Armaments School (Escuela 
de Armamentos), the School of Naval Engineering (Escuela de In- 
genieria Naval), and the Marine Corps School (Escuela de Infan- 
teria de Marina), all in Vina del Mar. 

The Second Naval Zone (Talcahuano) corresponds approxi- 
mately to the coastal portions of AM 3 and AM 4 and contains 
the main naval base, the Submarine School (Escuela de Submari- 
nes), the Seamen's School (Escuela de Hombres de Mar), and the 
Naval Artisans' School (Escuela de Artesanos Navales), all at Tal- 
cahuano. It also includes the Chiloe Naval District (Puerto Montt). 
The Third Naval Zone (Punta Arenas) corresponds to the coastal 
portion of AM 5 and includes the Beagle Channel Naval District, 
which is headquartered at Puerto Williams. In the early 1990s, a 
new naval dockyard was under construction at Bahia Catalina. The 
Fourth Naval Zone (Iquique) corresponds to the former Northern 
Naval District, which until 1991 formed part of the First Naval 
Zone and covered an area corresponding to the coastal portion of 
AM 6. 



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National Security 



The major operational command is the fleet, which includes four 
missile destroyers, two of which had been converted to helicopter 
carriers. The Submarine Command (La Fuerza de Submarinos) 
forms a separate operational command, with four submarines, a 
depot ship, and a subordinate group of frogmen commandos. The 
Transport Force (La Fuerza de Transportes) also forms an opera- 
tional command. In addition, some minor patrol vessels, auxiliaries, 
and service craft are distributed among the naval zones and dis- 
tricts (see table 44, Appendix). 

The 3,000 marines of the Navy Infantry Corps are organized 
into four detachments, based in Iquique, Vina del Mar, Talcahua- 
no, and Punta Arenas. Each detachment consists of a reinforced 
infantry battalion, a commando company, a field battery, an anti- 
aircraft battery, and logistic support units. In addition, there are 
some small embarked detachments, an amphibious assault battal- 
ion, and a logistics battalion, the latter two based in Valparaiso. 
Equipment is largely the same as that used by army infantry units. 
Most of the Marines' thirty LVTP-5 (landing vehicle, tracked, 
personnel) amphibious-landing vehicles are out of service, and their 
Cactus SAM systems have been disposed of. Amphibious-assault 
capability is confined largely to semirigid, inflatable craft. 

Naval Aviation, with 750 personnel and a total of forty-five air- 
craft and forty-two armed helicopters, is organized into four 
squadrons: the General Purpose Squadron VG-1, the Helicopter 
Squadron VH-1, the Maritime Reconnaissance Squadron VP-1, 
and the Training Squadron VT- 1 . Naval Aviation began a modern- 
ization process in 1990 with the acquisition of new French and 
German helicopters and United States patrol aircraft. The prin- 
cipal naval air base is at Torquemada, twenty kilometers north of 
Vina del Mar. The Torquemada Aeronaval Base has an efficient 
airport of 1,750 meters and is supported by the Naval Aviation 
Repair Center (Centro de Reparaciones de la Aviacion Naval — 
CRAN). There are minor bases at Punta Arenas and Puerto 
Williams. 

The Coast Guard, a component of the General Directorate of 
the Maritime Territory and Merchant Marine (Direccion Gene- 
ral del Territorio Mantimo y de la Marina Mercante), is an in- 
tegral part of the navy and has 1 ,500 personnel. The Chilean coast- 
line is segmented into thirteen maritime administrations (gober- 
naciones maritimas), comprising a total of forty- six port captaincies 
(capitanias de puerto). The seagoing elements of the service consist 
of two converted fishing vessels (employed primarily as buoy 
tenders), four coastal patrol craft, and ten high-speed cutters. There 
are also eleven inshore patrol craft, in addition to numerous small 



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surface skimmers and Zodiac craft used for inshore patrol and res- 
cue. The service also operates a floating medical-dental clinic, main- 
ly in the coastal waters off the Isla de Chiloe, and an air-sea rescue 
launch, based at Easter Island. 

Chile assumes responsibility for maritime search and rescue in 
an area extending approximately 4,000 kilometers west of its coast- 
line. It maintains search-and-rescue coordination centers at Iqui- 
que, Valparaiso, Talcahuano, Puerto Montt, and Punta Arenas. 
As none of its vessels is suitable for deep-sea patrol or rescue work, 
the Coast Guard may call on the ships and aircraft of the navy 
proper, in particular its helicopters, for support when necessary. 
The various port captains also maintain and staff lifeboats for in- 
shore rescue. 

Air Force 

The world's fourth oldest independent military air arm in exis- 
tence, the Chilean Air Force (Fuerza Aerea de Chile — FACh) 
predated its United States counterpart by seventeen years and be- 
came the most United States-oriented of Chile's three armed forces. 
With a total strength of 12,800 personnel and 120 combat aircraft, 
the FACh is organized into the Combat Command, the Personnel 
Command, and the Logistical Command. FACh aircraft are 
deployed among four air brigades with a total of five wings {alas) 
and twelve groups (grupos de aviacion) or squadrons. The Combat 
Command controls all combat units (see fig. 16). In early 1994, 
the FACh began studying the replacement of its fleet of thirty-two 
Hawker Hunter aircraft, of which only ten were operational (see 
table 45, Appendix). 

The Air Brigade (Brigada Aerea) is the main operational for- 
mation. Each wing, an administrative unit generally concentrat- 
ed at a single base wing (ala base), includes an Antiaircraft Artillery 
Group (Grupo de Artillerfa Antiaerea — GAA). An antiaircraft ar- 
tillery regiment in La Colina serves primarily as an administra- 
tive headquarters and training school for the five dispersed 
antiaircraft artillery groups. The First Wing (Ala 1) and Fourth 
Wing (Ala 4) each also include an Electronics Communications 
Group (Grupo de Comunicaciones Electronicas — GCE). 

The First Air Brigade, headquartered at the Los Condores Air 
Base, Iquique, covers northern Chile from the Peruvian border 
to the Rio Huasco in southern Atacama Region. It controls both 
the First Wing — based in Cerro Moreno, Antofagasta, and com- 
prising the Seventh Group (Grupo 7) and Eighth Group (Grupo 
8) — and the Fourth Wing, in Los Condores, which consists solely 
of the First Group (Grupo 1). The First Wing includes the Cerro 



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Moreno Liaison Squadron (Escuadrilla de Enlace Cerro Moreno) 
and GCE 31. The Seventh Group and the Eighth Group are lo- 
cated at Cerro Moreno. The Eighth Group includes inventory that 
formerly equipped the now-defunct Ninth Group (Grupo 9). The 
Fourth Wing includes the Los Condores Liaison Squadron (Es- 
cuadrilla de Enlace Los Condores), GAA 24, and GCE 34. The 
First Group in Los Condores serves as a combined light- strike and 
combat-training unit. In early 1992, the First Group began replac- 
ing its Cessna A-37B Dragonflies with a mix of Enaer/CASA T-36 
Halcon trainers, locally built in a joint venture between Spain's 
Aeronautic Constructions, S.A. (Construcciones Aeronauticas, 
S.A. — CASA) and Chile's National Aeronautical Enterprise 
(Empresa Nacional de Aeronautica — Enaer), and A-36 light-strike 
aircraft. 

The Second Air Brigade, based in Los Cerrillos, Santiago, covers 
the region southward from the Rio Huasco to the Rio Bio-Bio and 
consists of the Second Wing (Ala 2), which combines the Second 
Group (Grupo 2) with the existing Tenth Group (Grupo 10) and 
Eleventh Group (Grupo 11). The Second Wing includes GAA 31 
and GCE 32. The Second Group in Los Cerrillos is a special unit 
operating Canberra PR-9s in the Reconnaissance Squadron (Es- 
cuadrilla de Reconocimiento) and Beech 99As in the Electronic War 
Squadron (Escuadrilla de Guerra Electronica). The Tenth Group, 
based at Pudahuel Airport, Santiago, is the FACh's main trans- 
port unit. The Eleventh Group, in Los Cerrillos, is primarily a 
refresher training unit for flying personnel previously assigned to 
nonflying duties. The Second Group's inventory includes the two 
Gates Learjet 35As of the Aerial Photogrammetric Service (Servi- 
cio Aereo de Fotogrametna — SAF) that are based at Los Cerril- 
los. The Eleventh Group controls both the Piper PA-28-326 
Dakotas of the FACh Specialists' School and the Extra-300s of the 
"Los Halcones" (The Falcons) aerobatics team. 

The Third Air Brigade, headquartered at El Tepual Military 
Air Base, Puerto Montt, covers the region between the Rio Bfo- 
Bfo and Cerro San Valentin in southern Aisen Province. It con- 
sists of the Fifth Wing (Ala 5) at Puerto Montt, which in turn con- 
sists of the recentiy reactivated Third Group (Grupo 3), a light-strike 
unit based at Temuco, and the Fifth Group (Grupo 5), a light- 
transport unit based in Puerto Montt. The Fifth Wing also includes 
GAA 25 and GCE 35. 

The Fourth Air Brigade, based at the Carlos Ibanez Military 
Air Base, Punta Arenas, covers the region southward from Cerro 
San Valentin to Cape Horn. It consists of the Third Wing (Ala 
3), which is made up of the Fourth Group, the Sixth Group, and 



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Chile: A Country Study 

the Twelfth Group, all based at Punta Arenas. The Sixth Group 
(Grupo 6) is a special operations unit. This brigade also controls 
the Nineteenth Antarctic Exploration Group, based at Lieutenant 
Marsh Military Air Base on King George Island in the Chilean 
Antarctic Territory. The Third Wing, at Chabunco, includes GAA 
23 and GCE 33. 

Civic Action 

All three armed forces participate in military civic-action pro- 
grams, particularly in Chile's underpopulated northern and southern 
extremes. Engineer units of the army engage in road construction 
and maintenance. The navy provides lifesaving and emergency 
transportation services, in addition to maintaining navigational aids 
and regulating the activities of the Merchant Marine (Marina Mer- 
cante). The FACh provides emergency transportation and a 
meteorological service and plays a major role in disaster relief. It 
also regulates civil aviation and the administration of airports. All 
three of the armed forces jointly provide a comprehensive and up- 
to-date cartographic service covering the national territory and its 
coastal seas. They also provide medical services to civilians living 
near military bases in the less developed areas of the country. 

Defense Spending 

The armed forces have been entitled, under Law 18,948, to a 
level of funding out of the national budget at least equal to their 
1989 level, which was US$640 million. From 1990 to 1993, the 
defense budget amounted to US$1 billion annually, according to 
annual Military Balance surveys published by London's International 
Institute for Strategic Studies. Personnel reportedly account for 
more than 70 percent of the defense budget. 

According to the Copper Law enacted in 1954 by the govern- 
ment of Carlos Ibanez del Campo (1952-58), the armed forces are 
entitled by law to 10 percent of the total copper earnings of the 
state-run Copper Corporation (Corporacion del Cobre — Codelco). 
The purpose of this legislation is to provide the armed forces with 
stable funding and hard currency for major purchases abroad. In 
1987 the military government changed the law, applying the 10 
percent figure to all Codelco export earnings, including the sale 
of gold and molybdenum (the sale of which is insignificant com- 
pared with the copper sales). Between 1989 and 1993, Codelco 
provided more than US$1 .2 billion to the armed forces, as follows: 
US$313 million in 1989, US$287 million in 1990, US$223 mil- 
lion in 1991, US$204 million in 1992, and US$197 million in 1993. 



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These figures correspond to approximately 20 percent to 30 per- 
cent of the military budget. 

Under the Codelco subsidy, the armed forces are guaranteed a 
minimum of US$189 million annually, plus accumulated inflation 
(with 1987 as the base year). In 1993 the guaranteed minimum 
was US$210 million, but 10 percent of all Codelco saloj totaled 
only US$197 million, or US$13 million short of the guaranteed 
minimum. The 1993 shortfall in Codelco revenues resulted from 
the drastic fall in the price of copper. Codelco managers argued 
that the public treasury was responsible for making up the short- 
fall, but there was no mechanism for such a measure. 

The 1993 shortfall in Codelco revenues intensified the debate 
between those supporting the 1954 law (the armed forces and the 
political right) and those opposed to such an arrangement (Codel- 
co, the Ministry of Mining, and many within the center-left CPD 
governing coalition). Those opposed to the Codelco subsidy to the 
armed forces argued that it was an unacceptable burden for Codel- 
co, making it unable to compete in the world market. Total profits 
for Codelco in 1992 were US$920 million; in 1993 they were esti- 
mated at US$480 million. This means that 22 percent of all Codelco 
profit earnings in 1992 went to the armed forces and that approxi- 
mately 41 percent went in 1993. 

Those arguing for an end to the Codelco subsidy maintain that 
the armed forces should be funded through the general budget. 
In addition, there has been increasing pressure to privatize Codelco 
altogether, a measure that would probably include the abolition 
of the 10 percent subsidy. Those arguing against the Codelco sub- 
sidies for the armed forces have been careful to state that they are 
not trying to cut the resources of the armed forces but rather are 
giving them a more legitimate source. 

The armed forces oppose an end to their Codelco funds, fearing 
that their budget would be politicized and reduced. Furthermore, 
virtually all of the resources that the armed forces receive from 
Codelco are already committed beyond the year 2000, mostly 
through the purchase of armaments on credit. Ironically, the privati- 
zation of state firms that was initiated by the military government 
could lead to the end of the Codelco revenues for the armed forces. 

Principal beneficiaries of the increased spending in the early 1990s 
were the navy and air force. Their projected acquisitions include 
thirty British Harrier and twelve Sea-Harrier VTOL (vertical take- 
off and landing) aircraft, which the Chileans hope to have in ser- 
vice by 1997. Up to 1992, however, interservice rivalries appeared 
to have permitted the civilian administration, which favored cuts 
in military purchases, to take minimal action on this procurement. 



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Chile: A Country Study 

Spending on the army, navy, and air force accounted for approxi- 
mately 41 percent, 33 percent, and 21 percent, respectively, of to- 
tal defense expenditures; the remaining 5 percent was accounted 
for by costs under the general heading of national defense. 

Accusations of corruption have been made against several lead- 
ing figures of the military government and certain members of their 
families. As a result of these problems, public attitudes toward the 
armed forces have been adversely affected. An October 1991 sur- 
vey by CERC shows that 36. 1 percent of respondents picked mili- 
tary spending as a target for budget cuts. However, the military 
government received an average score for its overall performance. 
The CERC's survey of March 1991 shows that 57.9 percent of 
respondents thought the military's performance was "neither good 
nor bad"; 29 percent thought it was "bad"; and 11.2 percent 
thought it was "good." 

Manpower and Training 
Recruitment and Conditions of Service 

Historically, the profession of military science has been regard- 
ed as an honorable one in Chile. The army and to an even greater 
extent the air force have traditionally drawn their officer corps from 
among the middle classes, with a large portion coming from mili- 
tary families. Social elitism has been a traditional characteristic only 
of the officer corps of the navy. In 1900 military service became 
compulsory for all fit male citizens between the ages of eighteen 
and forty-five. Traditionally, only a small proportion of those eligi- 
ble would actually have been drafted for one year of training in 
the army or air force or two years in the navy. The overwhelming 
majority of the approximately 30,000 conscripts selected annually 
served in the army. (Of the 121,000 who registered in 1993, only 
29,400 were drafted.) Those not specifically exempted from ser- 
vice have had their names inscribed in a military register. Tradi- 
tional government policy also dictates that 10 percent of the annual 
conscript intake should consist of illiterate citizens, who are taught 
to read and write during their period of military service. On com- 
pletion of their period of training, conscripts are required to serve 
in the Active Reserve for a period of twelve years and then in the 
Second Reserve until the age of forty-five. However, apart from 
the skeleton cadres of the regular armed forces, no effective reserve 
organization appears to exist. 

The three armed forces all have female members, who serve 
voluntarily. They carry out subsidiary support functions, such as 
nursing and administrative work. 



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Military personnel are well fed and well housed. The three armed 
forces have an education program aimed at providing enlisted per- 
sonnel with useful skills for their return to civilian life. The navy 
and air force have relatively high educational requirements, even 
for compulsory enlistment, and impart technical skills to their con- 
scripts. 

Training 

Each of the armed forces maintains its own complex of training 
establishments, which are of uniformly high quality. These centers 
attract large numbers of students, not only from Latin America 
but also from countries such as the United States, Germany, Spain, 
Israel, and Taiwan. In addition to the complex of training estab- 
lishments maintained by each of the individual armed forces, the 
Ministry of Defense operates the National Defense Academy 
(Academia de Defensa Nacional), a triservice, university-level edu- 
cation establishment. Successful completion of its courses is a 
prerequisite to promotion to senior rank in all three services. 

The army's Military Academy, the War Academy (also known 
as the War College, or Escuela Superior de Guerra — ESG), the 
Army Aviation Command (Comando de Aviacion de Ejercito), and 
the Noncommissioned Officers' School are all located in Santia- 
go. Officer candidates must complete the five-year course of the 
Military Academy successfully before being commissioned and must 
complete an additional course at the War Academy to qualify for 
promotion to field rank or appointment to the General Staff. The 
army has a comprehensive range of specialist schools, including 
the Infantry School (Regimiento Escuela de Infanteria) in San Ber- 
nardo (near Santiago), the Mountain Warfare School (Regimien- 
to Escuela de Montana) in Rio Blanco (near Los Andes), the Special 
Forces School (Regimiento Escuela de Fuerzas Especiales y 
Paracaidistas) in Peldehue, the Armored Cavalry School (Regi- 
miento Escuela de Caballena Blindada) in Quillota, a subsidiary 
Armored Forces School (Escuela de Fuerzas Blindadas) in An- 
tofagasta, the Artillery School (Regimiento Escuela de Artillena) 
in Linares, the Engineers' School (Regimiento Escuela de In- 
genieros) in Tejas Verdes, and the Signals School (Regimiento Es- 
cuela de Telecomunicaciones) in Santiago. There are also the 
Military Polytechnical Academy (Academia Politecnica Militar) 
in Santiago, the Women's Military School (Escuela Militar Feme- 
nina) in Cajon de Maipo, and the Physical Education School (Es- 
cuela de Educacion Ffsica) in Santiago. 

The navy's Arturo Prat Naval School provides a five-year course 
for naval officer cadets. Officers must complete postgraduate courses 



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Chile: A Country Study 

at the Naval War Academy for promotion to flag rank or appoint- 
ment to the naval General Staff. Selected petty officers may qualify 
for commissioned rank by completing a two-year course at the Ar- 
turo Prat Naval School but are ineligible for promotion beyond 
the rank of captain. Noncommissioned personnel receive their train- 
ing at the navy's comprehensive range of specialist schools located 
in Vina del Mar or Talcahuano. The creation in Valparaiso of the 
Pilot Luis Pardo Villalon Antarctic Navigation School (Escuela de 
Navigacion Antartica "Piloto Luis Pardo Villalon") was announced 
in August 1991 by the director of the General Directorate of the 
Maritime Territory and Merchant Marine. 

The air force's General Staff controls the Air Force Staff Col- 
lege (Academia de Guerra Aerea). The FACh Personnel Command 
controls the other schools: the Air Force Technical College (Acade- 
mia Politecnica Aerea); the Specialists' School (Escuela de Es- 
pecialidades), which is equipped with Piper Dakotas; and the 
Captain Avalos Prado Aviation School (Escuela de Aviacion "Capi- 
tan Avalos"). The latter offers a basic three-year course to officer 
cadets, followed by two years of specialized training before com- 
missioning. It is equipped with the Enaer/CASA T-36 Halcon and 
the Enaer T-35 Pillan. The Logistical Command controls the non- 
flying Supply Wing and the Engineering and Maintenance Wing, 
headquartered at El Bosque. 

Uniforms, Ranks, and Insignia 

Army 

The uniforms and insignia of the three services reflect mainly 
British and German influence but also United States influence. The 
German influence is predominant in the army's uniforms (which 
are gray) and insignia, whereas the navy's uniforms (which are 
blue) and insignia and the air force's uniforms (which are blue- 
gray) and insignia resemble those of their British and United States 
counterparts (see fig. 17; fig. 18). Noncommissioned officers' rank 
insignia consist of combinations of chevrons, worn point down- 
ward as in the British Army. 

The army's service and dress uniforms closely resemble those 
of the old German Imperial Army. The uniform of the cadet corps 
of the Military Academy still features a pickelhaube (tall, plumed 
headgear) of the type worn by the Kaiser's Imperial Guard. The 
gray service uniform, with its stand-and-fall collar buttoned to the 
neck, worn with a plastic replica of the German "coal-scuttle" hel- 
met, also evokes memories of the Reichsheer (a German paramili- 
tary force). 



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Army rank insignia that are based on a series of gold or silver 
stars on shoulder straps or shoulder plaits are used for ranks up 
to and including that of brigadier, an unusual transitory grade be- 
tween that of colonel and brigadier general. According to the Santiago 
newspaper Hoy, the rank of brigadier did not exist before 1981 , when 
the reformulation of Chile's army ranks went into effect. Under 
the new military rank structure, brigadier is not a rank but a category 
that is assigned to senior colonels, including those slated for pro- 
motion to general. Although a brigadier has the rank of coronel and 
wears the three stars of a coronel on the shoulder boards, a brigadier 
wears a general's national coat of arms and laurel leaves on the 
collar. When the rank of brigadier was created, the names given to 
the generals were also changed, to include brigadier general (major 
general) and mayor general (lieutenant general). General officers wear 
rank insignia consisting of two to five gold or silver stars on shoul- 
der boards similar to those used by general officers of the United 
States Army. A president may designate officers who remain on 
duty beyond the compulsory thirty-eight years with the quasi-rank 
category of lieutenant general. The rank of capitdn general (captain 
general), the armed forces' highest rank (held by General Pinochet), 
is indicated by five stars. 

In summer a white tunic is substituted for the gray one. Com- 
bat uniforms in olive-green, khaki-drab, or camouflage pattern, 
worn with the World War II-style United States M-1942 steel hel- 
met, are virtually indistinguishable from those worn until the early 
1980s by the United States Army. Mountain troops wear white 
coveralls when operating in the snow. 

Navy 

Naval officers' uniforms are virtually indistinguishable from their 
British equivalents but, like rank insignia, are also similar to those 
used by the United States Navy. However, officers' rank insig- 
nia, worn on the jacket cuff with the dark-blue winter service uni- 
form and on shoulder boards with all other dress orders, follow 
United States practice, with a five-pointed star above various com- 
binations of horizontal stripes. Like their army counterparts, en- 
listed personnel wear rank insignia based on chevrons, worn point 
downward. Enlisted personnel wear both a stiff white- topped dress 
cap, somewhat similar to that of the British Royal Navy although 
with a much thinner ribbon, and a working cap identical to the 
United States sailor's white hat. Marine enlisted personnel wear 
dress uniforms reminiscent of those of the United States Marine 
Corps (USMC), but with a stand-and-fall collar to the tunic. Ma- 
rine officers wear the standard naval uniform and hold naval ranks. 



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Chile: A Country Study 

All ranks have a range of blue and white service uniforms, plus 
a slate- gray working uniform. A United States- style khaki-drab uni- 
form is sometimes worn with the ordinary naval cap; the Marines 
also have olive- green, khaki-drab, and camouflage combat uni- 
forms, almost indistinguishable from those of the USMC. The stan- 
dard steel helmet is the United States M-1942 pattern. Naval band 
members wear the Germanic bird's-nest shoulder ornament on stan- 
dard blue uniforms. 

Air Force 

FACh uniforms closely resemble those of the United States Air 
Force, although they are of a slightly darker shade of blue-gray. 
The use of lapel ornaments to supplement rank insignia imparts 
a Germanic flavor. Rank insignia, worn in gold on dress uniforms 
and light blue on all others, resemble those of the navy. However, 
the FACh emphasizes its status as the world's fourth oldest indepen- 
dent military air arm with its own peculiar rank designations. A 
captain is referred to as capitdn de bandada, a major as comandante 
de escuadrilla, and a lieutenant colonel as comandante de grupo. The 
terms coronet de aviacion, general de brigada aerea, general de aviacion, and 
general del aire are used for colonels, major generals, lieutenant gener- 
als, and generals, respectively. Various permutations and combi- 
nations of the basic blue uniform are worn. Shirtsleeve order is 
widely used, even for semiformal occasions, in summer and other 
periods of hot weather. Air crew generally wear black leather fly- 
ing jackets. Rank insignia are worn on shoulder boards with great- 
coat, flying jacket, and shirtsleeve orders. Noncommissioned rank 
insignia closely follow those of the navy, although army terminol- 
ogy is used. FACh ground troops use the United States Fritz Kev- 
lar ballistic helmet. 

Foreign Sources of Materiel 

Traditional Chilean military procurement policies have faith- 
fully mirrored the influences at work on the individual armed forces. 
Thus, the army has showed a distinct preference for weapons of 
German design, if not necessarily German manufacture. For ex- 
ample, the German-designed French Hotchkiss machine gun was 
standard in the 1930s. For similar reasons, the navy largely con- 
fined its patronage for new construction to British yards. The FACh, 
again mirroring its formative influences, was initially equipped 
largely with British materiel. However, large quantities of United 
States-built aircraft, together with the products of the renascent 
German aircraft industry, began to appear in the mid- 1930s. 



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During World War II, large amounts of United States materiel 
began to reach the army and FACh, but not the navy, as military 
aid. All three of the armed forces continued to receive increased 
quantities of United States equipment after the Rio Treaty of 1947. 
For almost two decades, United States war surplus dominated the 
inventories of the Chilean Armed Forces, as it did generally 
throughout the region. Between 1950 and 1977, the value of United 
States military assistance totaled US$97.4 million. Quantities of 
progressively obsolescent materiel of pre-World War II manufac- 
ture and non-United States origins were still noted in service in 
the early 1970s. 

In the 1960s, as elsewhere in Latin America, when the United 
States declined to supply modern materiel because of restrictions 
on exports of high technology, other markets were explored. The 
army acquired the Swiss SG-510 rifle, which became standard, 
and quantities of French and Swiss armored fighting vehicles, 
together with Italian artillery pieces. The navy and FACh continued 
to favor British equipment. 

With the widespread boycott of the military regime follovving 
the 1973 overthrow of Salvador Allende, Chile found many tradi- 
tional sources of equipment closed. United States arms exports to 
Chile were formally terminated in 1976 after the adoption of the 
Kennedy Amendment (see Glossary) in 1974. Procurement was 
pursued on an ad hoc basis, and materiel was acquired from wher- 
ever available. This inevitably resulted in an increasingly heter- 
ogeneous and unbalanced equipment inventory. During this period, 
the navy and FACh encountered particular difficulties in the ac- 
quisition of replacements and spares. Much ingenuity was applied 
to prolonging the life of otherwise obsolete or worn-out materiel, 
and local industrial potential was expanded dramatically. 

Chile managed to acquire United States arms and technology 
through third parties even while the United States prohibition of 
arms sales was in effect. In addition to spurring the Chileans to 
develop their own arms industry, the embargo prompted Chile to 
develop closer ties with arms-producing countries such as Brazil, 
France, Germany, Britain, and Israel. With the return of democra- 
cy in 1990, the Aylwin government assured the United States that 
it would continue to prosecute those responsible for the assassina- 
tion of Chilean diplomat Orlando Letelier, an opponent of the mili- 
tary government, and his assistant, United States citizen Ronnie 
Moffit, in Washington in 1976. As a result of these assurances, the 
embargo was lifted, and United States arms sales to Chile resumed. 

The return to civilian government in 1990 resolved most of the 
procurement problems experienced during the period of military 



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Chile: A Country Study 



rule (1973-90). Nevertheless, future procurements probably will 
continue to be broadly based. The army's main priorities are to 
standardize its equipment inventory and replace obsolescent 
weapons that are incapable of further upgrading, specifically its 
battle tanks and some of its artillery equipment. Missile air defense 
used to be the exclusive responsibility of the FACh, with its Blow- 
pipe and Mistral and its new French Mygale vehicle-mounted 
antiaircraft system. However, in 1993 the army launched its own 
international competition program for the acquisition of a new 
surface-to-air missile (SAM) system. According to Military Tech- 
nology [Bonn], the army was interested in two types of vehicle- 
mounted systems — existing SAM systems or procurement only of 
missile launchers and munitions. The latter option would entail 
mounting the new systems on Chilean-made Piranha 6x6 or 8x8 
armored personnel carriers (APCs). The new missile system will 
be integrated with the army's newly adopted, Chilean-developed 
Lince C 2 air defense system. In May 1992, the FACh, for its part, 
tested its new French Mygale antiaircraft system, which has a com- 
puterized radar that seeks the target and is linked to four vehicles 
that carry Mistral ground-to-air missile launchers to protect air bases 
against supersonic aircraft attacks. Chile is the first and reported- 
ly the only country in the region to own this system. 

The navy requires at least one more Leander-class frigate, at 
least two more modern Oberon-class submarines, and an additional 
replenishment tanker. The retirement of the cruiser O'Higgins also 
left the fleet without a major command vessel. Various possibili- 
ties, including the acquisition of the British destroyer leader Bristol, 
were being considered. The Bristol attempt failed, however, when 
the British Royal Navy demanded that its Sea Dart system be re- 
moved prior to sale. The navy also hoped to establish a combat 
air unit equipped with Sea Harriers, although this objective was 
unlikely to be achieved in the foreseeable future. 

The FACh requires some additional heavy-lift transport aircraft 
and replacements for its diminishing number of aging Hunter 
fighter-bombers. Possible replacements include the British Hawk 
200, the United States F-16, and even the former Soviet Union's 
MiG-29. The FACh commander in chief stated publicly in 1992 
that no immediate Hunter replacement was contemplated and that 
future procurements would focus on the acquisition of smaller num- 
bers of higher-performance combat aircraft. For example, the FACh 
purchased ten A-37 light attack aircraft that year through an agree- 
ment with the United States. 

Between sixteen and twenty Chilean Northrop F-5E Tiger 
III fighter aircraft were upgraded with Israeli technology by the 



318 



National Security 



state-owned Israeli Aircraft Industries (IAI) in Tel Aviv in 1988-93. 
Chile had purchased these aircraft from the United States in 1976, 
but they were held for many years under the regulations of a 1976 
addendum to the Kennedy Amendment. The jets' avionics were 
greatly improved, and their electronic and navigation equipment 
were fully replaced by IAI. The Israeli company was also upgrad- 
ing Mirage 50 aircraft purchased by Chile from France many years 
earlier to the Mirage 500C/Pantera standard, a configuration resem- 
bling the IAI's Kfir. In addition, the Israelis in 1993 were con- 
verting a FACh Boeing 707 to carry the Phalcon airborne early 
warning system developed by an Israeli electronics company. 

The Defense Industry 

Chile has for many years produced its own small arms, ammu- 
nition, and explosives, but it did not have a real defense industry 
until the 1970s. The almost universal boycott after the armed forces 
overthrew the Allende administration in 1973, and in particular 
the 1974 Kennedy Amendment, which deprived Chile of main- 
tenance support for its large inventory of United States- 
manufactured defense equipment, threw the Chileans back on their 
own resources. At the time, war with Argentina over the Beagle 
Channel seemed likely, and local industrial potential was expand- 
ing dramatically. Thus, Chile became a major producer of defense 
equipment, the third largest in Latin America after Brazil and Ar- 
gentina. In addition to small arms and ammunition, Chile manufac- 
tured infantry-support weapons, both armored and soft-skinned 
vehicles, artillery pieces, ballistic rocket systems, antiaircraft ar- 
tillery weapons, naval vessels, military aircraft, aerial bombs and 
rockets, and radar and electronic warfare equipment. Neverthe- 
less, according to defense analyst Daniel Prieto Vial, by 1991 Chile 
supplied no more than 3 percent of its own defense needs and pur- 
chased the remaining 97 percent elsewhere. 

As Chile became a successful exporter, the biennial International 
Air and Space Fair (Feria Internacional del Aire y del Espacio — 
FIDAE) became its principal marketing event. First held in March 
1980 as a modest flying display and exhibition of air defense 
products to celebrate the fiftieth anniversary of the FACh's for- 
mation, what was then called the International Air Fair (Feria In- 
ternacional del Aire — FIDA) was an unexpected success. It was 
decided to repeat what was originally conceived of as a one-time 
event every second year. In 1990 the name was changed to FIDAE 
to reflect the aerospace dimension. FIDAE continued to grow stead- 
ily both in size and in international importance and by 1992 was 
the major forum for the display of military equipment in the 



319 



Chile: A Country Study 



Southern Hemisphere, attracting more than 300 exhibitors from 
twenty-seven countries to Los Cerrillos Air Base. These included 
not only other arms-producing nations in the developing world but 
also the major manufacturers of defense equipment in the leading 
industrialized nations. 

Army Ordnance 

Chile's major producer of ground-defense materiel, the Army 
Factories and Yards (Fabricas y Maestranzas del Ejercito — Famae), 
which is subordinate to the army's Military Industry and Engineer- 
ing Command (Comando de Industria Militar e Ingenieria — 
CIMI), had been operating for 182 years in 1994. Famae employs 
about 3,000 people in factories throughout the country and is in 
charge of maintaining and renewing the army's equipment. Since 
the 1960s, Famae has assembled both the Belgian FN FAL rifle 
and its close-support version, the FN FAP, locally known as the 
FN FALO. More recently, Famae has also produced under license 
the Swiss SG-542 assault rifle, which was replacing the SG-510 
in service with the army. In addition, Famae is producing both 
a .32-caliber revolver and a 9mm submachine gun, together with 
60mm, 81mm, and 120mm mortars, based on Brandt prototypes. 
An agreement with Britain's Royal Ordnance, signed in Decem- 
ber 1989, provides for the joint development of the Rayo 160mm 
multiple-rocket launcher system, beginning in 1994. The Rayo was 
tested successfully in October 1991. 

Famae produces ammunition for all these weapons, as well as 
hand grenades, Bangalore torpedoes, two types of antipersonnel 
mines, and an antitank mine, together with ammunition for the 
Oto Melara Model 56 105mm howitzer. Two types of antiperson- 
nel bombs, two types of high-explosive aerial bombs, and one type 
of cluster bomb also have been developed, in conjunction with the 
FACh. These have been exported to Ecuador and Paraguay. Ex- 
ports to Iran, Pakistan, and elsewhere also have been rumored. 
The revelation of contraband arms sales to Croatia via Hungary 
at the end of 1991 caused a minor political scandal early in 1992. 

A new development beginning in early 1992 was the produc- 
tion of armored vehicles. Famae acquired a license to assemble the 
Swiss Mowag Piranha 8x8 APC. Prototype variations mounting 
either the Cockerrill 90mm or the Israeli HVMS 60mm high- 
velocity gun also have been produced. In 1992 Famae negotiated 
for the local manufacture of the Cadillac-Gage Stingray light tank. 
In early 1993, General Pinochet headed an official delegation 
that visited China. During the visit, an important agreement on 
military cooperation and coproduction of military equipment was 



320 



A freighter navigating Chile 's scenic coastal waters 
Courtesy Embassy of Chile, Washington 

signed between Famae and China's Northern Industrial Corpo- 
ration (Norinco). 

Naval Equipment 

Naval Docks and Yards (Astilleros y Maestranzas de la 
Armada — Asmar) was established in 1895, with facilities at Tal- 
cahuano and Valparaiso. Asmar was reorganized on a commer- 
cial basis in 1960. In early 1992, Asmar Talcahuano accounted 
for about 80 percent of the activities of the corporation, despite 
the recent upgrading of repair facilities at Valparaiso and the in- 
auguration of smaller ship repair maintenance facilities at Punta 
Arenas (the latter operated in collaboration with Sandok Austral 
of South Africa). With more than 4,500 employees, Asmar Talca- 
huano has become the largest and most modern shipyard on the 
Pacific Coast south of California. It has carried out repair and main- 
tenance work for three foreign navies, in addition to its work for 



321 



Chile: A Country Study 

the Chilean Navy and Merchant Marine. Asmar has also performed 
contract work on units of the merchant fleets of such countries as 
Canada and Denmark. 

Over the years, Asmar has built a number of minor vessels for 
the Chilean Navy and Coast Guard. Extensive modifications were 
also made to the four County-class missile destroyers purchased 
from Britain in the early 1980s. A combination of economic difficul- 
ties and the ready availability of suitable craft on the secondhand 
market had, however, prevented the construction of either a project- 
ed series of fifty-four-meter patrol craft, for which a license was 
obtained from Fairey Brooke Marine of Britain in 1988, or the 
P-400-type fast attack craft, for which a license agreement was 
negotiated with Chantiers de Normandie in the same year. A project 
to build at least four submarines was announced in 1990 but had 
not progressed any further. However, Asmar displayed a human- 
torpedo-type midget submarine, developed in association with Cos- 
mos of Livorno, Italy, at FIDAE '92. 

In early 1992, Asmar' s Talcahuano facility was building four 
patrol boats for the navy, the first of which was scheduled to be 
in service in 1993. Asmar was also preparing a program for four 
helicopter-equipped offshore patrol vessels to police Chile's 
200-nautical-mile exclusive economic zone. 

In addition to its own independent electronics division, Military 
Manufacturers (Fabricaciones Militares — Fabmil), founded in 
1982, Asmar has also established (in 1983) an electronics manufac- 
turing and development subsidiary, Defense Systems (Sistemas 
Defensas — Sisdef), located in Vina del Mar. This firm, a joint 
venture with Britain's Feranti International, has developed a mul- 
tipurpose radar system that is equally adaptable to use aboard ship 
or on land. Asmar itself has produced a naval gunnery control ra- 
dar, which was fitted aboard the Almirante-class destroyers and 
other vessels of the Chilean Navy, a mortar-locating radar for the 
army, and a land-based air early warning radar. A newer ship- 
yard, founded in 1974 with its facilities located at the mouth of 
the Rio Valdivia in southern Chile, is Naval Shipyards and Ser- 
vices (Astilleros y Servicios Navales — Asenav). 

Aircraft Equipment 

In the past, several types of light aircraft were developed in Chile 
by the FACh-controlled National Aircraft Factory (Fabrica Nacional 
de Aeronaves — FNA), although none of these entered production. 
Starting in 1981, however, the FACh's Engineering and Main- 
tenance Wing commenced the development of a variant of the Piper 
236 Dakota light aircraft as a replacement for the Beech T-34. 



322 



National Security 

The result was the T-35 Pillan two-seater primary trainer. In 1984 
Enaer, the National Aeronautical Enterprise, was set up in San- 
tiago as a state enterprise with autonomous management to han- 
dle this project. Although Enaer 's main contracts have been with 
the FACh, by late 1991 it had sold forty Pillan training aircraft 
to the Spanish Air Force, fifteen to the Paraguayan Air Force, ten 
to the Panamanian National Air Service, and sixty to the FACh. 
(Those for the Spanish Air Force were built under license in Spain 
under the name Tamiz.) The FACh proposed ultimately to build 
up to 200 Pillans, mainly in the turboprop version unveiled in 1986 
and originally designated the Aucan. 

In a joint venture with Spain, Enaer developed a version of the 
Spanish CASA 101 Aviojet fighter, called the T-36 Halcon (Fal- 
con), to replace the Cessna T-37 in the advanced trainer/light- strike 
role. Fifty-six of these aircraft were in service with the FACh. A 
radar-equipped maritime strike version, designated the A-36M and 
armed with the British Aerospace Sea Eagle air-to-surface missile, 
was also developed; it was flown in prototype form in 1992. In 1993 
Enaer and the Brazilian Aeronautics Company (Embraer) signed 
an agreement, as partners, to share the risks of the EMB-145 pro- 
gram, which will produce a minimum of 400 of these jets. 

Employing about 2,000 people, Enaer has the capability to 
produce one aircraft per week, although the plant was not work- 
ing to full capacity in early 1992. The engines for the Pillan and 
the Halcon are imported from the United States and Spain, respec- 
tively. The airframes and most other parts, including such sophisti- 
cated items as ejection seats, are produced in Chile. Enaer also 
manufactures parts for the CASA 235 and the BAe 146. 

Enaer 's Electronics Division has developed and produced the 
Caiquen I and II early warning radars, which are in full produc- 
tion. Enaer has also developed the Itata airborne electronic 
intelligence-gathering system, the Medusa radio interception and 
jamming system, and the Eclipse chaff/infrared decoy launcher. 

Cardoen Industries 

Despite the spectacular expansion of the public sector of the 
Chilean defense industry since the mid-1970s, the privately owned 
Cardoen Industries (Industrias Cardoen), owned by Carlos 
Cardoen Cornejo, is the most successful Chilean defense manu- 
facturer in the export field. In less than eight years, this firm de- 
veloped from a modest operation manufacturing demolition charges 
for the mining industry into a diversified industrial empire. In the 
early 1990s, it employed more than 800 persons in six separate fac- 
tory complexes producing a variety of defense equipment, together 



323 



Chile: A Country Study 

with nondefense-related products, and had subsidiaries in Ecuador, 
Italy, Spain, and Greece. Under a 1989 agreement with the 
Guatemalan government, Cardoen Industries agreed to establish 
a plant for the manufacture of explosives, grenades, and mines in 
Guatemala. 

In 1979 Cardoen Industries took over the project of rebuilding 
the Chilean Army's World War II-vintage M-3A1 half-track APCs, 
which Famae had commenced five years earlier but had been forced 
to drop for lack of funds. This venture resulted in the development 
of an entirely new vehicle, the BMS-1 Alacran, a number of which 
were acquired by the Chilean Army. 

Building on the experience gained in the Alacran project, the 
Cardoen company commenced the assembly, under license, of the 
Swiss Mowag Piranha 6x6 APC in the early 1980s. In 1993 there 
were 180 of these in service with the Chilean Army as the 
Cardoen/Mowag Piranha. Several variants of this vehicle, includ- 
ing a mortar carrier and a fire-support version, with the turret- 
mounted 90mm Cockerill gun, were also developed. 

Simultaneously with the Piranha project, Cardoen Industries also 
developed the VTP-1 Orca 6x6 APC/armored load carrier, the 
world's largest vehicle of its kind, capable of carrying sixteen men 
with their equipment. The Chilean Army eventually ordered 100 
Orcas. Limited numbers of another tracked infantry vehicle, the 
VTP-2 4x4 Escarabajo light APC, were in service with the FACh 
for airfield defense. With Chinese collaboration, the company also 
produced a 6x6 all-terrain truck for both civilian and military pur- 
poses and a light two-seater hovercraft. 

In keeping with its origins as a manufacturer of explosives, 
Cardoen produces three types of demolition charges and a series 
of detonators and Bangalore torpedoes, in addition to three types 
of hand grenades, two types of antipersonnel mines, and an anti- 
tank mine. The company also produces 70mm ballistic rockets, 
300-kilogram fragmentation bombs, and three types of general- 
purpose aircraft bombs. Experiments with fuel-air bombs were 
reported to have been carried out at the corporation's testing area 
in the Atacama Desert. 

The most successful of all Cardoen products, however, and one 
used extensively by Iraq against coalition forces in the Persian Gulf 
War of January-February 1991, is the patented Cardoen cluster 
bomb, a 227-kilogram bomb whose 240 "bomblets" create a lethal 
zone of up to 50,000 square meters. The company reportedly sold 
more than US$200 million worth of cluster bombs to Iraq between 
1984 and 1988 and was described in early 1991 as the world's lead- 
ing producer of this type of bomb. 



324 



National Security 



Cardoen Industries has also developed a low-cost combat helicop- 
ter, based on the Bell 206. A demilitarized version of this gained 
a United States Federal Aviation Administration license in 1990. 
Nevertheless, in 1992 the prototype remained impounded in the 
United States on the grounds of the company's known involve- 
ment with Iraq, and Cardoen' s contract to service Bell helicopters 
was revoked. 

In early 1992, Cardoen Industries and its various subsidiaries 
were finding the previously close association with Iraq, particu- 
larly the illegal export of zirconium for use in armor-piercing cluster 
bombs, highly embarrassing in the wake of the 1991 Persian Gulf 
War. Consequently, the company was assiduously emphasizing its 
nonmilitary activities at the expense of the defense sector, on which 
the prosperity of Cardoen Industries had been built. Following a 
two-year investigation of Carlos Cardoen, United States officials 
brought civil charges against him and moved to confiscate Cardoen- 
owned properties in Florida valued at more than US$30 million. 
These problems prompted Cardoen Industries to change its name 
to Metalnor. 

Minor Defense Manufacturers 

Several Chilean companies not primarily engaged in the produc- 
tion of military materiel also have dabbled in this field. Longest 
established of these is the General Society of Commerce (Sociedad 
General de Comercio — Sogeco). Founded in 1941, Sogeco did not 
enter the arms business until 1974. It was initially concerned with 
the production of bomb trolleys for the FACh. Sogeco also devel- 
oped the ejection seat for the Pillan and, through its subsidiary 
Famil, has produced two models of a towed twin 20mm antiair- 
craft artillery gun, known as the FAM-2 and based on either the 
Oerlikon KAD 20 or the Hispano-Suiza 820. The firm of Maki- 
na, which produces the armored bodies of the Cardoen vehicles, 
itself developed the Carancho 180, a 4x4 airfield defense armored 
vehicle, for the FACh. Ferrimar Limitada, a firm engaged mainly 
in the construction of steel-hulled fishing craft and with no previ- 
ous experience in the defense field, developed an artillery computer, 
designated Carmo, a light landing craft, and projects for modula- 
rized mobile command centers, in addition to its own Avispa cluster 
bomb in the mid-1980s. Despite some success on the export mar- 
ket, the Avispa appeared to be out of production in 1992, follow- 
ing litigation with Cardoen, which claimed infringement of 
copyright. The interest of Ferrimar in the field of military produc- 
tion appeared subsequently to have lapsed. 



325 



Chile: A Country Study 

The Security Forces 

Under the 1980 constitution, the police are referred to as the 
Forces of Order and Public Security, their role being defined as 
the maintenance of law and order. There are two separate law en- 
forcement forces: the Carabineros and the Investigations Police, 
both under the operational control of the Ministry of Interior. The 
Carabineros constitute a national police force that forms a poten- 
tial reserve for the army and has a paramilitary organization. The 
Investigations Police is a national plainclothes organization com- 
parable in some respects to the United States Federal Bureau of 
Investigation (FBI). 

The Carabineros 

During the colonial period, there existed a fifty-man police unit 
known as the Queen's Dragoons, which was responsible for law 
enforcement in the Santiago area. This force changed its name to 
Dragons of Chile (Dragones de Chile) in the early years of the 
republic and, by 1850, had increased in strength to 300. It was 
subsequently incorporated into the army as a cavalry regiment. 
By that time, civil police forces had also been set up in the major 
population centers. In 1881 the Rural Police Law created a separate 
rural police force in each province, and six years later each munici- 
pality was authorized to set up its own local police force. 

In 1902 four of the army's seven cavalry regiments were ordered 
to detach a squadron apiece to form a new entity to be known as 
the Border Police (Gendarmes de la Frontera) and to be engaged 
primarily in the suppression of banditry in the less developed regions 
of the country. Despite being administratively and operationally 
subordinate to the Ministry of Interior, this unit remained ulti- 
mately under the jurisdiction of the minister of war. Five years 
later, it acquired a larger establishment and changed its name to 
the Carabineros Regiment (Regimiento de Carabineros). 

Although still lacking a formal permanent institutional existence, 
in 1909 the Carabineros established an Institute of Instruction and 
Education, which admitted its first class of police cadets in August 
of that year. Five years later, the responsibilities of the force were 
extended to railroad security. Finally, in 1919, the force acquired 
a formal independent existence under the Ministry of Interior, and 
its title was changed again to the Carabineros Corps (Cuerpo de 
Carabineros). Six years later, by which time the corps consisted 
of 204 officers and 3,760 enlisted personnel, the Carabineros ac- 
quired a new organization that combined their various indepen- 
dent squadrons into five Rural Service Regiments, together with 



326 



Two members of 
the Carabineros patrolling 
during the 19th of 
September Armed 
Forces Day parade 
in Santiago in 1985 
Courtesy 
David Shelton 



a Railway Regiment, Training Regiment, and Customs Squadron, 
the latter based at Valparaiso. 

The strength, resources, and qualities of the various municipal 
and rural police forces varied enormously. In 1924, in an effort 
to provide a degree of uniformity, the country was divided into 
five police zones, with their headquarters at Antofagasta, Valparaiso, 
Santiago, Talca, and Conception. The same law divided the police 
functionally into three divisions: the Public Order Division, en- 
trusted with general peacekeeping on a relatively passive level; the 
Security Division, with a role of active law enforcement; and the 
Identification Division, which embraced record keeping and general 
crime detection. This arrangement provided for the coordination 
of the activities of the various existing law enforcement agencies, 
on a zonal basis, with the General Directorate of Police (Direc- 
tion General de Policia) at the national level. At that time, in the 
mid- 1920s, the various police forces numbered 728 officers and 
8,628 enlisted personnel. 

Although now downgraded in importance, the provinces and the 
municipalities continued to maintain their individual police forces. 
Only the municipal police of Santiago and Valparaiso seem to have 
been effective, however, and in 1927 all law enforcement agencies 
were incorporated in a single national force, the Carabineros of 
Chile. The force had a total strength of 1,123 officers and 15,420 
enlisted personnel in 1929. 



327 



Chile: A Country Study 



In 1993 the Carabineros numbered 31,000, including officers, 
noncommissioned officers (NCOs), and a significant women's ele- 
ment. Although normally under the jurisdiction of the Ministry 
of Interior, the Carabineros were put under the Ministry of Defense 
during the period of national emergency following the overthrow 
of the Allende regime. Despite the return of civilian government 
in 1990, the Carabineros remain subordinate to the Ministry of 
Defense, but their operations are coordinated by the Ministry of 
Interior. The Aylwin administration authorized an increase in 
strength of 1,100 annually over the 1991-94 period. 

Organization 

The Carabineros are commanded by a director general and or- 
ganized geographically into three main zones — the Northern Zone, 
the Central Zone, and the Southern Zone. Each of these zones is 
in turn subdivided into prefectures (prefecturas), subprefectures (sub- 
prefecturas), commissariats (comisarias) , subcommissariats {subcomisa- 
rias), lieutenancies (tenencias), reserves (retenes), and outposts (puestos 
avanzados) . 

The Carabineros also include marine and air sections. The Air 
Police, which ranks as a separate prefecture, dates from 1946, when 
it was formed with a single Aeronca Champion aircraft. The Air 
Police acquired its first helicopter in 1968; by 1993 its inventory 
of helicopters had increased to fourteen (see table 46, Appendix). 

Operationally, the Carabineros are divided into seventeen depart- 
ments: analysis and evaluation, armaments and munitions, bor- 
ders and boundaries, civic action, data processing, drug control 
and prevention of offenses, finance, forestry, internal security, legal, 
minors, police services, public relations, social action, supply, traffic 
control, and transport. In addition to their normal law enforce- 
ment and allied functions, the Carabineros perform extensive civic 
action, including the provision of medical and dental services to 
the populations of the less developed regions of the country and 
the protection of forests and wildlife. The Carabineros are also 
responsible for customs control and the Presidential Guard. Separate 
prefectures deal with the Air Police, the Radio Patrol, and the Spe- 
cial Forces. 

The largest single concentration of Carabineros is in Santiago, 
where apart from headquarters and administrative personnel, the 
schools, and the Presidential Guard, there are five geographical 
prefectures: the Central Prefecture, North Prefecture, South Prefec- 
ture, East Prefecture, and West Prefecture. These are in turn subdi- 
vided into twenty- six territorial and nine operational commissariats. 



328 



National Security 



Recruitment and Training 

Service in the Carabineros is voluntary, and admission standards 
are high. Applicants are required to have completed secondary 
school and to have passed exacting physical examinations and psy- 
chological tests. A highly professional organization, the Carabineros 
have enjoyed a prestige and universal respect that are almost unique 
among Latin American police forces. The force's principal problem 
at the beginning of the 1990s was the lack of adequate resources 
to combat crime. Although budget appropriations for the Carabi- 
neros had risen steadily in the early 1990s (from US$37 million 
in 1990 to US$78 million in 1993), low pay and even inadequate 
clothing were a source of discontent within the ranks. The force 
has its own cadet, NCO, and staff officer schools, in addition to 
a specialists' training center, all of which are located in Los Cerri- 
llos, Santiago. 

Uniforms 

The Carabineros wear an olive-drab uniform with green trim, 
a high-crowned cap with brown leather visor, and brown leather 
apparel. Motorcycle police wear white crash helmets and gaunt- 
lets with the standard service uniform. Riot helmets and shields 
are used by special units. Female members wear a version of the 
male uniform with skirt and hard-crowned, kepi-type cap. Officers' 
rank insignia are identical to those of the army but are worn on 
silver rather than gold shoulder straps and plaits. NCO rank in- 
signia are in silver lace and worn on the upper sleeve. 

The Investigations Police 

The Investigations Police, numbering about 4,000, is a plain- 
clothes civilian agency engaged primarily in the detection and in- 
vestigation of crime. Headquartered in Santiago, the force has seven 
substations in other parts of Chile. It functions throughout the coun- 
try in support of the Carabineros. Operationally, its chain of com- 
mand runs from the director general through a deputy director to 
the inspectors in charge of the provincial substations. Functionally, 
it is divided into a number of departments, including administra- 
tion, foreign and internal police, health, justice, personnel, and 
welfare. The force also includes the Air Police Brigade, responsi- 
ble for airport surveillance; the National Identification Bureau, 
which keeps records of all adult citizens and foreign residents and 
issues identification cards that must be carried at all times; and 
the Forensic Medicine Laboratory. In addition, the Special Units 



329 



Chile: A Country Study 



Prefecture comprises six brigades dealing with fraud, murder, rob- 
beries, vehicle theft, vice, and women's affairs. 

The Investigations Police functions in close collaboration with 
the International Criminal Police Organization (Interpol) and with 
the intelligence services of the army, navy, and air force. During 
the military government, some Investigations Police agents became 
involved in criminal activities. By early 1992, its new director, 
Horacio Toro, a retired army general appointed by the Aylwin 
government, had withdrawn more than 200 officers from duty be- 
cause of their alleged involvement in drug trafficking. 

Internal Security Intelligence Organizations 

In the immediate aftermath of the 1973 coup, a semiformal um- 
brella group, the National Intelligence Directorate (Direccion Na- 
cional de Inteligencia — DIN A), was formed, ostensibly to coordi- 
nate the activities of the intelligence services of the army, navy, 
air force, Carabineros, and Investigations Police. From the begin- 
ning, DINA functioned as a secret police and was engaged in the 
repression of dissidence within the state and the exaction of revenge 
on its enemies without. So notorious were its activities that of 957 
identified "disappearances" of enemies of the Pinochet regime, 
DINA was blamed by the Rettig Commission on human rights 
abuses for perpetrating 392. 

DINA has also been linked by prosecutors in the United States, 
Italy, Argentina, and Chile to the murder of General Carlos Prats, 
the former commander in chief of the army, in Buenos Aires in 
1974; the attempted murder of Bernardo Leighton, the Christian 
Democratic leader, in Rome in 1974; and the assassination of 
Orlando Letelier, a former member of the Allende administration 
and ambassador to the United States under the Popular Unity 
(Unidad Popular) regime, in Washington in 1976. DINA was 
abolished in 1977 and replaced by a new organization known as the 
National Information Center (Centro Nacional de Informacion — 
CNI). 

The functions of the CNI combined those functions carried out 
by the United States Central Intelligence Agency (CIA), FBI, and 
Secret Service. Although human rights abuses abated significant- 
ly after the abolition of DINA, its successor continued to draw criti- 
cism and was disbanded upon the return of civilian government 
in 1990. Most of its approximately 2,000 operatives were absorbed 
either by army intelligence or by a new coordinating body for mili- 
tary intelligence, operating under the aegis of the National Defense 
Staff and known as the Directorate of National Defense Intelligence 
(Direccion de Inteligencia de la Defensa Nacional — DIDN). The 



330 



National Security 



DIDN concerns itself primarily with defense rather than with in- 
ternal intelligence. 

The Aylwin government relied mainly on the Investigations 
Police to combat terrorist groups. Technical assistance has been 
obtained from Italy and Germany. The Carabineros created a new 
countersubversive intelligence body in May 1990, the Directorate 
of Carabineros Political Intelligence (Direccion de Inteligencia 
Polftica de Carabineros — Dipolcar). Its previous unit was impli- 
cated in human rights violations. In early 1993, the government 
was finally able to enact new legislation, after more than a year 
of congressional delays in approving the project, creating the Direc- 
torate of Public Security and Information (Direccion de Seguridad 
Publica e Informaciones). The new directorate is under the Ministry 
of Interior and allows the ministry to coordinate the intelligence 
and anticrime and antiterrorist activities of the Carabineros and 
Investigations Police. 

Public Order and Internal Security 
Incidence of Crime 

Crime rates in the early 1990s remained far below those of the 
United States. However, the notion that common crime was rare 
in Chile until the 1970s and 1980s is a myth. Chile's rural areas 
were plagued with outlaw gangs in the early nineteenth century. 
The most notorious gang, Los Pincheira, operated during the 
1817-32 period, purportedly in defense of the cause of the king 
of Spain. Based in the Andes and the heights of Chilian, the four 
brothers who headed the gang — Antonio, Santos, Pablo, and Jose 
Pincheira — wreaked death and destruction in the provinces of Nuble 
and Concepcion. Nineteenth-century historian Benjamin Vicuna 
Mackenna described their rural terror, and Los Pincheira became 
the subject of novels as well. The gang grew to the size of an army, 
requiring the government of Joaquin Prieto Vial (1831-36, 
1836-41) to mobilize the army to eradicate the group. General 
Manuel Bulnes was put in charge of combating Los Pincheira in 
its own territory. At the command of 1,000 soldiers, Bulnes sur- 
prised Los Pincheira near the Palaquen lagoons, killing more than 
200 bandits in a pitched battle. With the defeat of Los Pincheira 
in 1832, the government was able to establish its authority in all 
of the national territory. 

The crime situation was confusing to analyze under the mili- 
tary regime in the 1970s and 1980s because the government and 
media tended to lump ordinary criminal behavior together with dis- 
sident violence. In the early 1980s, officials were prone to attribute 



331 



Chile: A Country Study 

bank robberies, assassinations, and shootouts with police to left- 
wing extremist organizations, although skeptics often pointed to 
rightist provocateurs or to government agents themselves as being 
responsible for at least some of the incidents. Figures on crime and 
criminals released by the National Statistics Institute (Instituto Na- 
cional de Estadfsticas — INE) are not very enlightening as to the 
actual status of crime in the country. There are no breakdowns 
of figures according to gender in either the juvenile or the adult 
category, and there are no statistics on prison populations. 

News media have also contributed to a perception that crime 
had increased in the early 1990s, but crime statistics are still difficult 
to obtain. Few, if any, published sources provide general crime 
statistics, with the main exception of figures for arrests, readily avail- 
able in the INE's Compendio estadistico. According to sociologist J. 
Samuel Valenzuela, the general crime pattern did not appear to 
have changed markedly in 1992 from 1980-91. However, violent 
crime was reported to have increased, and the average age of those 
committing crimes had declined. 

Available figures for 1980-91 show a mixed picture because some 
forms of crime remained stable or declined, while others had in- 
creased (see table 47, Appendix). Of those that had increased, the 
biggest jump occurred in the mid-1980s. Crime during the period 
of democratic transition from 1989 to 1991 did not fall into a sin- 
gle pattern. The biggest jump in the rate of robberies occurred in 
the mid-1980s. The average rate increased by 82.5 percent between 
1986 and 1988, compared with the first three years of the decade. 
Between 1989 and 1991, the rate increased by 7 percent over the 
average in the previous three years. The trend between 1989 and 
1991 , however, was steadily upward. There was no overall increase 
or decrease in the rate of burglaries. The average for the 1980-91 
years was a 17 percent decrease over 1986-88. However, the rate 
of burglaries was higher between 1989 and 1991 than it was be- 
tween 1980 and 1982. Like robberies, murders had increased sig- 
nificantly in the mid-1980s. In 1986-88 the average rate increased 
by 27 percent over the 1980-82 years. In 1989-91 the average rate 
was a 9.1 percent increase over the previous three years. 

A poll conducted by the Center for Public Studies (Centro de 
Estudios Publicos — CEP) and the Adimark Company in March 
1993 in Osorno reveals the existence of a very real fear of crime 
in the country. According to the CEP/Adimark survey, 59 per- 
cent of those polled perceived more crime than a year earlier. Only 
13 percent felt that crime had dropped. Moreover, 76 percent said 
that crime was more violent, whereas only 8 percent said it was 
less violent. In a retrospective analysis, the study revealed that 



332 



National Security 



citizen concern about crime rose sharply between December 1989 
and March 1991 , with the figure approaching 65 percent in 1991 . 
The study also reveals that 59 percent of those polled thought that 
the Carabineros provided the needed assistance. Nevertheless, some 
43.3 percent said they were dissatisfied with police protection in 
their neighborhood; only 37.2 percent were satisfied. 

Narcotics Trafficking 

Chile long remained relatively unaffected either by drug traffick- 
ing or by extensive drug abuse. Some expansion, both of drug 
trafficking and of narcotics abuse, occurred during the late 1960s 
and early 1970s, reflecting an international trend. By the early 
1970s, Chile had become an important regional center for cocaine 
processing. The problem had become sufficiently acute to occa- 
sion the passage of the country's first antinarcotics law by Allende's 
Popular Unity government early in 1973. Later that year, the mili- 
tary government formed a special narcotics unit within the 
Carabineros and began a big crackdown. This was highly effec- 
tive, bringing the narcotics problem under control within a year. 
The Carabineros also pioneered the introduction of antinarcotics- 
oriented, youth education programs. A pilot project was set up in 
1976, eight years before any comparable program was initiated in 
the United States. Toward the end of the period of military rule, 
a new form of drug-related crime was noted in the northern Chilean 
provinces adjoining the Bolivian and Peruvian frontiers: the illicit 
exporting to Peru and Bolivia of chemicals used in the processing 
of cocaine. 

Since the early 1980s, drug trafficking has been growing in Chile. 
The country has become more prone to drug trafficking not only 
because of its geographic configuration and location, bordering on 
the world's two leading producers of coca — Peru and Bolivia — 
but also because of its economic stability. With its open-market 
economy and bank-secrecy laws, Chile is an attractive haven for 
money laundering. A number of drug traffickers who were expelled 
by the military regime after the 1973 coup cultivated contacts with 
drug-trafficking groups while living in exile in the United States 
and Europe. On returning to Chile to reside, these traffickers, act- 
ing as finance men and heads of operations, profited from their 
international contacts. Chile served as a good transit country 
also because of its booming export activities. In mid- 1992 an 
operational director of the Carabineros reported that money ob- 
tained through drug trafficking was being laundered through the 
construction industry in central Chile and the fishing industry in 
the far south. 



333 



Chile: A Country Study 



In order to enhance the country's antidrug capabilities, the Ayl- 
win government signed several antidrug agreements in 1992, in- 
cluding one with Italy in October (which also included antiterrorist 
cooperation) and one with Bolivia in November. Chile's most seri- 
ous drug-related problems by 1992 reportedly involved transit 
through the country along the northern corridor to Arica. In early 
1993, a new cocaine/cocaine paste drug route reportedly came from 
Bolivia through the Azapa Valley, an area with a sizable Bolivian 
and Peruvian population located to the east of the city of Arica. 
At that time, the Investigations Police began implementing a new 
drug enforcement plan, with the aid of a turbo Cessna 206 for 
patrolling the area along the Bolivian and Peruvian borders, in coor- 
dination with motor vehicles and twenty powerful all-terrain Cagiva 
motorcycles, donated by Italy. 

After 1989 drug-related crime increased dramatically, particu- 
larly in the northern part of the country, to the extent that police 
reportedly estimated in 1990 that 20 percent of the population of 
the city of Arica between the ages of fifteen and thirty-four were 
habitual drug users. Of 385 homicides (or 0.3 per 10,000) in Chile 
during 1990, nearly 20 percent were classified as drug related. By 
comparison, eight were classified as resulting from acts of terrorism. 
During 1990 about 30 percent of robberies were also said to be 
drug related. The size of drug seizures varied considerably. In 1991 
some 220,000 kilograms of cocaine were seized, compared with 
36,500 in 1988 and 798,000 in 1989. Police estimated that only 
10 percent of the drug traffic was getting intercepted. Most of the 
cocaine seizures occurred in the northern port of Arica. 

Criminal Justice 

The 1980 constitution establishes the independence of the 
judiciary from the executive and legislative arms of government 
(see The Courts, ch. 4). The legal system is based on Roman law. 
There is no provision for trial by jury, and heavy reliance is placed 
on police evidence in criminal cases. Judges are required to be quali- 
fied not only in law but also in criminology and psychology. There 
is provision for an annual review by the Supreme Court of the fit- 
ness of the members of the judiciary to continue to hold office. 

The Criminal Code of Chile, first drafted in 1870 after two un- 
successful attempts, was promulgated in 1874 and modified in 1928. 
Its models were the criminal codes of Austria, Belgium, France, 
and Spain. In 1930 extensive modifications were made, including 
the abolition of the death penalty, although capital punishment was 
reinstituted for certain crimes in 1937. 



334 



National Security 



The Criminal Code is divided into general and special sections. 
The former enumerates the general principles of criminal law relat- 
ing to jurisdiction, the concept of crime, attempted crime, second 
party participation in the commission of crime, habitual criminals, 
penalties, circumstances that exclude criminal responsibility, and 
circumstances that extinguish criminal responsibility. The latter 
section defines specific offenses and their appropriate penalties. In 
this respect, the courts are charged with ensuring that the penalty 
is not merely appropriate to the crime but that it is also appropri- 
ate to the criminal's ability to discharge it. 

Crimes are divided into three basic categories: serious crimes 
(crimenes), minor crimes (delitos), and misdemeanors (faultas). Crime 
is defined as a voluntary act or omission for which the law imposes 
punishment. Criminal responsibility is specifically excluded in cases 
in which defendants are insane or less than ten years of age. The 
responsibility of minors ten to sixteen years of age is also excluded 
unless it can be proven that they acted with full understanding of 
their acts. Criminal responsibility is also excluded for violent acts 
committed in the defense of one's own person, property, or rights 
and in defense of those of one's spouse or those of a third party. 
Also excluded are violent acts committed accidentally in the exer- 
cise of a legal act, violent acts committed in the exercise of public 
duty, violent acts committed under duress or fear, and the killing 
or wounding of the accomplice of an adulterous spouse. Criminal 
responsibility is also excluded in the case of crimes of omission owing 
to a legal or irresistible cause. Suicide and attempted suicide are 
specifically decriminalized. 

The Penal System 

The penal system also has been standardized since 1930, com- 
ing under the jurisdiction of the minister of justice. The system 
emphasizes the rehabilitation of the offender as its primary goal. 
The normal prison regime is humane; the degree of confinement 
is reduced progressively throughout the duration of the prisoner's 
sentence and ends, subject to good behavior, in conditional release 
for periods up to 50 percent of the total sentence. The lengths of 
the successive stages in the relaxation of the prison regime are varied 
and are implemented on the basis of semiannual judicial review, 
which takes into account behavior and perceived progress toward 
rehabilitation. 

Under the Criminal Code, all persons sentenced for periods be- 
tween sixty-one days and five years are obligated to work. Prisoners 
are remunerated for their work on a rising scale as they progress 
through the penal system and are eligible for the benefits of social 



335 



Chile: A Country Study 

insurance on the same basis as those in voluntary employment. 
However, a percentage of prisoners' earnings is deducted to cover 
their keep and the maintenance of the penal service and as a con- 
tribution toward the discharge of civil responsibility arising from 
their offenses. Work can be either directly for the state, on con- 
tract, or on lease. Examples of work for the state include manufac- 
ture of such items as road signs or automobile license plates, or 
public road construction and maintenance. Work on contract to 
private firms or individuals is still carried out within the penal in- 
stitution, but with tools and materials supplied by the contractor. 
Work on lease differs inasmuch as the private contractor is respon- 
sible for the housing and maintenance of the prisoner in secure 
conditions. Prisoners may also undertake additional discretionary 
work of a gainful nature within certain limitations laid down by 
the prisons administration. 

There are some 140 penal institutions of various types with a 
capacity for approximately 15,000 inmates. Of these about sixty- 
five are intended to house short-term (sixty-day maximum) or re- 
mand prisoners; six are intended for long-term prisoners; twenty- 
three are correctional institutions for females and are supervised 
by a Catholic order of nuns; one is an open prison, located on Isla 
Santa Maria, southwest of Concepcion; one is a special institution 
for juvenile offenders; and the remainder house prisoners serving 
sentences of between sixty-one days and five years. These are ad- 
ministered by the Gendarmerie, or Judicial Police of Chile (Gen- 
darmeria de Chile), which reports to the Ministry of Justice and 
numbers approximately 4,000 members. 

A combination of social and political factors have inflated the 
prison population relative to its capacity; in 1990 it exceeded 25,000 
inmates. Some 60 percent of these were on remand awaiting trial. 
After the riots of 1980, the military regime was widely condemned 
for crowding 1,800 inmates into Santiago's San Bernardo Prison. 
However, the same institution, designed to hold 800, housed 3,300 
inmates during the third quarter of 1990. 

Terrorism 

During the first five years of the Pinochet regime (1973-78), the 
armed forces and security forces successfully contained left-wing 
resistance against the government. Many members of Chile's old- 
est left-wing extremist group, the Movement of the Revolution- 
ary Left (Movimiento de la Izquierda Revolucionaria — MIR), 
which was founded in 1965 and had close ties to Cuba, were killed 
or exiled. Nevertheless, the MIR remnants, under the leadership 
of the late Salvador Allende's nephew, Andres Pascal Allende, 



336 



National Security 



continued to operate a small underground network in Chile. The 
MIR's principal leader, Miguel Enriquez, returned clandestinely 
to Chile in 1978 to revitalize the movement and organize for armed 
struggle and was soon joined by newly infiltrated cadres who had 
been trained in Cuba and Nicaragua. The security forces kept the 
MIR off balance, however, and Enriquez was killed in September 
1983. 

Several new left-wing terrorist groups emerged in the early 1980s. 
One was the United Popular Action Movement-Lautaro (Movi- 
miento de Accion Popular Unitario-Lautaro — MAPU-L), a splinter 
of the United Popular Action Movement (Movimiento de Accion 
Popular Unitario — MAPU), a party founded in 1969 by a break- 
away group from the Christian Democrats. Many MAPU leaders 
embraced Marxist positions, but the party was not a terrorist group. 
In December 1982, the MAPU-L established a youth group, the 
Lautaro Youth Movement (Movimiento de Juventud Lautaro — 
MJL), and a group dedicated to the overthrow of the military 
government, the Lautaro Popular Rebel Forces (Fuerzas Rebeldes 
Populares Lautaro — FRPL). The Manuel Rodriguez Patriotic 
Front (Frente Patriotica Manuel Rodriguez — FPMR), an armed 
group affiliated with the Communist Party of Chile (Partido 
Comunista de Chile — PCCh), was formed in 1983. In response 
to increased armed attacks, the regime promulgated the 1984 An- 
titerrorist Law, which greatly expanded the list of crimes that could 
be categorized as terrorism. 

In the second half of the 1980s, the FPMR became the dominant 
terrorist group, emerging as a sophisticated, well-trained, and well- 
supported terrorist organization. Just how strong it was became 
evident in August 1986 when the security forces captured a huge 
FPMR arms cache that was traced to Cuba. That September 
FPMR commandos nearly succeeded in assassinating Pinochet with 
M-16 assault rifles and antitank rockets. In response to these two 
events, Pinochet declared a state of siege and mounted an offen- 
sive against the FPMR and MIR. 

Intensified police and security-service pressure on the FPMR 
and MIR continued throughout 1987, inhibiting the groups' ac- 
tivities. That year the FPMR splintered as a result of the PCCh's 
denunciation of violence; the breakaway Maoist-oriented FPMR- 
Autonomous (FPMR-Autonomo — FPMR- A) became the most ac- 
tive left-wing terrorist group, whereas the FPMR followed the 
PCCh's line and laid down its arms after the restoration of democra- 
cy in 1990. Mainly as a result of FPMR- A activities, terrorist at- 
tacks increased in the late 1980s. 



337 



Chile: A Country Study 

Meanwhile, the security forces failed to apprehend any mem- 
bers of right-wing extremist groups, such as the Chilean Anti- 
Communist Action Group (Accion Chilena Anticomunista — 
AChA) and the Nationalist Combat Front (Frente Nacionalista de 
Combate — FNC). The ability of these groups to operate with ap- 
parent impunity led to speculation in the late 1980s that their ac- 
tions were unofficially sanctioned by some officials in the security 
forces. 

The rationale for continued left-wing subversion and right-wing 
counterterror effectively vanished with the return of civilian govern- 
ment in 1990. Many left-wing extremists who had fled the coun- 
try following the 1973 coup were allowed to return in 1990. 
Nevertheless, left-wing terrorism did not disappear. Within a few 
months after President Aylwin's accession to power, the FPMR- 
A and MJL showed that they remained committed to armed strug- 
gle and were responsible for most of the increased number of ter- 
rorist incidents in the early 1990s. The total number of documented 
terrorist actions during the first year of the Aylwin government 
was 207 (including 148 attacks on buildings and other properties), 
compared with 465 similar actions during 1984 and 401 in 1985 — 
two peak years for terrorist activity during the latter half of the 
period of military rule. 

The Aylwin government's attempts to control terrorism were 
quite successful. In 1991 it expanded training and increased 
efforts by the Investigations Police and the Carabineros. Police 
improved their counterterrorism capabilities, surpassing the effec- 
tiveness of the military government. This was made evident by their 
success in arresting numerous leaders and in uncovering several 
safe houses and training sites used by Chilean terrorists. By early 
1993, more than 200 terrorist militants were under indictment. The 
capture of many top leaders of the MAPU-L and FPMR-A crip- 
pled these organizations, and terrorist incidents declined. The Ayl- 
win government appointed special investigating judges to try the 
more serious cases of terrorism, such as the assassination of Sena- 
tor Jaime Guzman Errazuriz on April 1, 1991. 

National Security Outlook 

Neither terrorism nor foreign military aggression posed a sig- 
nificant threat to Chilean national security in early 1994. The es- 
tablishment of democratic governments in both Argentina and Chile 
has resulted in unprecedented economic, political, and even mili- 
tary cooperation between the two countries. By early 1994, both 
countries had ratified the Tlatelolco Treaty, which bans the de- 
velopment of nuclear weapons. 



338 



National Security 



Nevertheless, many Chileans believe there is a constant threat 
from neighboring countries. Consequently, Chile is attempting to 
maintain a credible deterrent force. Occasional border disputes still 
occur, so Argentina, Chile, and Peru attempt to be prepared to 
use military force, if necessary, in defense of their perceived na- 
tional interests. The overall situation of the Chilean Armed Forces 
in early 1994 was positive, but modernization of their forces had 
become a priority. Despite the lifting of the arms embargo, modern- 
ization was continuing to a significant extent within the framework 
of the national arms industry and indigenous technology. At the 
same time, the armed forces were looking to the European and Unit- 
ed States arms markets for more advanced equipment to compete, 
for example, with the sale of thirty-six United States-made A-4M 
Skyhawk bombers to Argentina. It would be ironic, however, if 
the democratic governments in Argentina and Chile were to be- 
come involved in an arms race over mutual fears that the other 
side had a slight military supremacy. 

Agustm Toro Davila's Sintesis historico militar de Chile provides 
a good summary of Chile's military history from the earliest times 
to the 1891 Civil War. Frederick M. Nunn's The Military in Chilean 
History and Chilean Politics, 1920-1931 are highly recommended. 
Despite its unwieldy title, Theodorus B.M. Mason's The War on 
the Pacific Coast of South America Between Chile and the Allied Republics 
of Peru and Bolivia, 1879-81 (published in 1883) provides a concise 
history of the War of the Pacific. A much more recent and well- 
documented study is William F. Sater's Chile and the War of the Pa- 
cific. Roberto Querejazu Calvo's weighty Guano, salitre, y sangre is 
probably the best single- volume history of the War of the Pacific, 
despite a slight pro-Bolivian bias. 

Daniel Prieto Vial's Defensa Chile, 2000 provides an interesting 
insight into at least one geostrategist's views of the direction that 
Chile's defense policies should take. A somewhat conflicting view 
of the subject from an ostensibly economic viewpoint is Fernando 
Bustamente, Miguel Navarro, and Guillermo Patillio's ^Cual debe 
ser el gasto militar en el Chile de los 90? The best global treatment of 
the contemporary Chilean defense structure is Raul Sohr's Para 
entender a los militares. The same author's study of Chile's defense 
industry in La industria militar chilena is also definitive. 

On the subject of the Chilean Army, the "Chile" section of John 
Keegan's World Armies is useful, and Cuatro siglos de uniformes en Chile 
by Alberto Marquez Alison and Antonio Marquez Alison, in 



339 



Chile: A Country Study 



addition to being the definitive work within its own field, provides 
a wealth of historical information beyond the limitations implied 
by its title. The same may be said of R J. Bragg and Roy Turn- 
er's Parachute Badges and Insignia of the World and, to a lesser degree, 
of Bert Campbell and Ron Reynolds's Marine Badges and Insignia 
of the World. Emilio Meneses Ciuffardi's El factor naval en las rela- 
ciones entre Chile y los Estados Unidos, 1881-1951 is essential reading 
on modern Chilean naval history and is much broader in scope 
than its tide implies. Rodrigo Fuenzalida Bade's four- volume histor- 
ical work, La armada de Chile desde la alborada al sesquicentenario, 
1813-1968, is unmatched by any comparable history of the army 
or air force. The history of the Carabineros remains to be written. 

Even the English-language professional and technical press tends 
to ignore the subject of Latin American defense, and the best sources 
of current and relatively objective information on the subject are 
the Spanish monthly journal Defensa Latinoamericana and the 
German-published, Spanish-language journal Tecnologia Militar, 
which also has an English version, Military Technology. (For further 
information and complete citations, see Bibliography.) 



340 



Appendix 



Table 

1 Metric Conversion Coefficients and Factors 

2 Population by Selected Native American Group, 1992 

3 Population by Region, Gender, Urban-Rural Breakdown, and 

Persons of Foreign Birth, 1992 

4 Area and Population Density of the Regions, Selected Years, 

1980-93 

5 Growth of Santiago's Population, Selected Years, 1865-1992 

6 Distribution of Agricultural Landownership, 1965, 1973, and 

1987 

7 Composition of the Population and Labor Force, 1987-91 

8 Employed Population by Sector, 1987-91 

9 Index of Real Wages and Salaries, 1978-93 

10 Average Monthly Wage by Wage-Earning Group, 1989 

11 Evolution of Unemployment, 1960-92 

12 Distribution of Personal Income by Decile in Metropolitan 

Region of Santiago, 1969, 1979, and 1989 

13 Distribution of Household Consumption by Quintile in 

Metropolitan Region of Santiago, Selected Years, 1969-91 

14 Health Indicators, Selected Years, 1960-91 

15 Public and Private Education by Education Level, 1981 and 

1986 

16 Population by Gender and Declared Religious Affiliation, 1992 

17 Opinions Regarding the Legalization of Divorce, December 

1990 

18 Opinions Regarding Abortion, December 1990 

19 Birthrates in and out of Wedlock, Selected Years, 1965-88 

20 Gross Domestic Product (GDP) by Sector, 1989, 1990, and 1991 

21 Index of Manufacturing Production in Selected Sectors, 

1988-92 

22 Mining Output, 1991 and 1992 

23 Copper Production, 1987-92 

24 Agricultural and Forestry Exports, 1989, 1990, and 1991 

25 Fruit Production, Crop Years 1987-88 to 1990-91 

26 Yields of Principal Agricultural Products, Crop Years 1986-87 

to 1990-91 

27 Fishing Industry Exports, 1987-91 

28 Forest Area Planted by Public Sector and Private Sector, 

1982-90 



341 



Chile: A Country Study 

29 Electric Energy Production by Producer, 1988-92 

30 Public-Sector and Private-Sector Construction, 1987-91 

31 Key Economic Indicators, 1988-92 

32 Direction of Trade, 1989-92 

33 Public-Sector Finance, 1990-93 

34 Electoral Results for the Chamber of Deputies, March 1973 

35 Electoral Results of the Presidential Elections of December 14, 

1989 

36 Electoral Results for the Chamber of Deputies and Senate, 

December 14, 1989 

37 Presidencies, Cabinet Changes, and Ministerial Turnovers, 

1932-41 and 1946-73 

38 Administrative Divisions and Their Capitals, 1993 

39 National-Level Results of the Municipal Elections of June 23, 

1992 

40 Ideological Orientation of Electorate, June 1990 to March 1993 

41 Party Orientation of Electorate, December 1990 to March 1993 

42 Regional-Level Electoral Results of the Presidential Elections 

of December 11, 1993 

43 Major Army Equipment, 1993 

44 Major Naval Equipment, 1993 

45 Major Air Force Equipment, 1993 

46 Major Carabineros Equipment, 1993 

47 National Crime Statistics, Selected Years, 1980-91 



342 



Appendix 



Table 1. Metric Conversion Coefficients and Factors 



When you know Multiply by To find 



Millimeters 0.04 inches 

Centimeters 0.39 inches 

Meters 3.3 feet 

Kilometers 0.62 miles 

Hectares (10,000 m 2 ) 2.47 acres 

Square kilometers 0.39 square miles 

Cubic meters 35.3 cubic feet 

Liters 0.26 gallons 

Kilograms 2.2 pounds 

Metric tons 0.98 long tons 

1.1 short tons 

2,204 pounds 

Degrees Celsius 1.8 degrees Fahrenheit 

(Centigrade) and add 32 



Table 2. Population by Selected Native American Group, 1992 * 
(in thousands of persons age fourteen and over) 



Mapuche Aymara Rapa Nui Total 

Age-Group Males Females Males Females Males Females Males Females 



14-24 125.2 119.0 6.8 5.9 2.6 3.413 4.7 128.3 

25-39 176.5 166.5 8.4 7.9 3.3 4.318 8.2 178.7 

40-49 73.9 70.1 4.0 4.0 1.3 1.77 9.2 75.8 

50-64 65.7 67.0 3.7 3.7 1.4 2.0 70.8 72.7 

65 and over 29.5 34.7 1.9 2.2 0.7 1.03 2.1 37.9 



TOTAL 470.7 457.3 24.9 23.6 9.4 12.5 505.0 493.4 



* Figures may not add to totals because of rounding. 

Source: Based on information from Chile, Instituto Nacional de Estadfsticas, Resultados 
oficiales: Censo de poblacion, 1992, Santiago, 1993, 69. 



343 



Chile: A Country Study 



Table 3. Population by Region, Gender, Urban-Rural Breakdown, 
and Persons of Foreign Birth, 1992 





Region 


Males 


Females 


Total 


I 


. . Tarapaca 


171,356 


168,223 


339,579 


II 


. . Antofagasta 


206,786 


203,938 


410,724 


Ill 


Atacama 


117,835 


113,038 


230,873 


IV 


Coquimbo 


249,578 


254,809 


504,387 


V 


. . Valparaiso 


670,889 


713,447 


1,384,336 


VI 


Libertador General Bernardo 










O'Higgins 


353,379 


342,990 


696,369 


VII 


. . Maule 


420,800 


415,341 


836,141 


VIII 


Bio-Bio 


857,343 


876,962 


1,734,305 


IX 


La Araucama 


389,074 


392,168 


781,242 


X 


. . Los Lagos 


475,758 


473,051 


948,809 


XI 


Aisen del General Carlos 










Ibanez del Campo 


42,410 


38,091 


80,501 


XII 


Magallanes y La Antartica 










Chilena 


74,669 


68,529 


143,198 




Metropolitan Region of 










Santiago 


2,523,377 


2,734,560 


5,257,937 


TOTAL 




6,553,254 


6,795,147 


13,348,401 


Urban 




5,364,760 


5,775,645 


11,140,405 


Rural 




1,188,494 


1,019,502 


2,207,996 


Persons of foreign birth 


58,204 


56,393 


114,597 



Source: Based on information from Chile, Instituto Nacional de Estadfsticas, Resultados 
oficiales: Censo de poblacion, 1992, Santiago, 1993, 68. 



344 



Appendix 



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345 



Chile: A Country Study 

Table 5. Growth of Santiago's Population, Selected Years, 1865-1992 



Percentage of Total 

Year Population Percentage Increase Population 



1865 115,377 n.a. 6.3 

1875 129,807 12.5 6.3 

1885 189,332 45.8 7.6 

1895 256,403 35.5 9.5 

1907 332,724 29.8 10.3 

1920 507,296 52.5 13.7 

1930 712,533 40.5 16.6 

1940 952,075 33.6 19.0 

1952 1,350,409 41.8 22.8 

1960 1,907,378 41.2 25.9 

1970 2,730,895 43.2 30.7 

1980 3,899,495 42.8 35.1 

1992 * 5,170,293 32.6 39.0 



n.a. — not available. 

* Preliminary census figures. 

Source: Based on information from Ximena Toledo O. and Eduardo Zapater A., Geografia 
generaly regional de Chile, Santiago, 1989, 183; and Chile, Instituto Nacional de Es- 
tadfsticas, Santiago (various publications). 



Table 6. Distribution of Agricultural Landownership, 
1965, 1973, and 1987 
(in percentages) 



Area 1 1965 1973 1987 2 



0-5 


9.7 


9.7 


10.0 


5-20 


12.7 


15.7 


29.0 


20-40 


9.4 


12.7 


15.0 


40-80 


12.8 


19.7 


26.0 




55.4 


2.7 


18.0 


Reformed sector 3 


0.0 


39.9 


0.0 



1 In number of basic irrigated hectares. 

2 Estimated. 

3 For definition of reformed sector — see Glossary. 



Source: Based on information from Sergio Gomez and Jorge Echenique, La agricultura chilena, 
Santiago, 1991, 101, 106. 



346 



Appendix 



Table 7. Composition of the Population and Labor Force, 1987-91 1 
(in thousands of persons) 





1987 


1988 


1989 


1990 


1991 


Population 














3,812 


3,853 


3,896 


3,939 


3,984 




. 8,520 


8,663 


8,809 


8,958 


9,114 


Total population 2 


12,333 


12,516 


12,704 


12,897 


13,098 


Working-age population 












Labor force 


4,354 


4,552 


4,675 


4,729 


4,794 




. 4,166 


4,111 


4,134 


4,229 


4,320 


Total working-age population . 


. 8,520 


8,663 


8,809 


8,958 


9,114 


Labor force 












Employed 


4,011 


4,266 


4,425 


4,460 


4,540 




1A A 


OQC 


ZjU 




O Z.A 


Total labor force 


4,355 


4,552 


4,675 


4,729 


4,794 


Unemployed 












Laid-off 


285 


231 


204 


229 


220 


Seeking employment for the 














59 


55 


46 


40 


34 




344 


286 


250 


269 


254 


Unemployment rate 3 


7.9 


6.3 


5.3 


5.7 


5.3 




6.5 


5.1 


4.4 


4.9 


4.6 



1 Surveys conducted in October-December periods. 

2 Figures may not add to totals because of rounding. 

3 In percentages. 



Table 8. Employed Population by Sector, 1987-91 1 
(in thousands of persons) 













1991 2 


Sector 


1987 


1988 


1989 


1990 


Number 


Percentage 


Agriculture, forestry, and 














fishing 


837 


865 


857 


866 


881 


19.2 


Mining 


n.a. 


n.a. 


n.a. 


101 


n.a. 


2.3 


Manufacturing 


607 


670 


746 


716 


753 


16.0 


Electricity, gas, and 














water 


25 


25 


23 


21 


21 


0.5 




208 


276 


299 


286 


321 


6.4 




690 


731 


756 


788 


774 


n.a. 


Financial services 


177 


182 


192 


202 


228 


22.2 


Transportation and 














communications .... 


253 


274 


301 


309 


308 


7.0 




1,132 


1,155 


1,150 


1,178 


1,173 


26.4 


Unspecified 


1 


1 








1 


0.0 


TOTAL 


3,930 


4,179 


4,324 


4,467 


4,460 


100.0 



n.a. — not available. 

1 Surveys conducted in October-December periods. 

2 Figures for number of employees and for percentages of employees are taken from different sources. 



Source: Based on information from Banco Central de Chile, Boletin Mensual [Santiago] (var- 
ious issues); and Chile, Instituto Nacional de Estadfsticas, Compendio estadistico, 1991, 
Santiago, 1991, Table 141-02. 



347 



Chile: A Country Study 



Table 9. Index of Real Wages and Salaries, 1978-93 
(1970 = 100) 



Year 






December Index 


Year 


December Index 


1978 






76.0 
82.2 
89.3 
97.3 
97.6 
86.9 
87.1 
83.2 


1986 


84.9 


1979 , 






1987 


84.7 


1980 






1988 


90.3 


1981 






1989 


92.0 


1982 






1990 


93.7 


1983 . 






1991 


98.3 


1984 






1992 


102.8 


1985 






1993 * 


106.4 












* April. 












Source: 


Based on 


information from Corporacion de Investigaciones 


Economicas para 




Latinoamerica, 


"Set de estadfsticas 


economicas," Coleccion Estudios de CIEPLAN 




[Santiago] 


, No. 


92, July 1992, Table 11; and Corporacion de Investigaciones 



Economicas para Latinoamerica, "Set de estadfsticas economicas," Coleccion Estu- 
dios de CIEPLAN [Santiago], January 1994, Table 12. 



Table 10. Average Monthly Wage by Wage-Earning Group, 1989 
(in United States dollars) * 



Wage-Earning Group Wage 



Executives and top administrators 2,327 

Professionals and technicians 858 

Retail sales people 565 

Specialized employees 526 

Administrative personnel 444 

Skilled workers 325 

Unskilled workers 251 

Domestic and other personal service workers 250 



* Exchange rate 297 Chilean pesos = US$1 



Source: Based on information from Chile, Instituto Nacional de Estadfsticas, Compendio 
estadistico, 1990, Santiago, 1990, 42-43. 



348 



Appendix 

Table 11. Evolution of Unemployment, 1960-92 
(in percentages) 



Years Unemployment Rate of Unemployment 1 



1960-69 6.4 6.4 

1970-74 5.3 5.3 

1975-79 13.4 17.6 

1980-84 14.3 22.3 

1985-89 8.1 11.6 

1990 6.0 6.0 

1991 6.5 6.5 

1992 2 4.8 4.8 



1 Includes the Minimum Employment Program (Programa de Empleo Mmimo — PEM) and the Em- 
ployment Program for Heads of Household (Programa de Ocupacion para Jefes de Hogar — POJH), 
which are makeshift work programs financed by the state to help the jobless. 

2 Average for the first four months. 

Source: Based on information from Programa Economfa del Trabajo, Serie de indicadores 
economico sociales: Series anuales, Santiago, 1990, 51; and Corporacion de Investiga- 
ciones Economicas para Latinoamerica, "Set de estadfsticas economicas," Colec- 
cidn Estudios de CIEPLAN [Santiago], No. 92, July 1992, Table 9. 



Table 12. Distribution of Personal Income by Decile in 
Metropolitan Region of Santiago, 1969, 1979, and 1989 
(in cumulative percentages) 



Decile 1969 1979 1989 



1 1.3 1.4 1.2 

2 3.7 3.8 3.5 

3 7.0 7.0 6.6 

4 11.3 11.1 10.6 

5 16.7 16.1 15.7 

6 23.4 22.6 22.0 

7 32.0 31.0 30.0 

8 43.6 42.8 41.0 

9 61.0 60.9 58.4 

10 100.0 100.0 100.0 



Source: Based on information from Programa Economfa del Trabajo, Serie de indicadores 
economico sociales: Series anuales, Santiago, 1990, 68. 



349 



Chile: A Country Study 



Table 13. Distribution of Household Consumption by Quintile 
in Metropolitan Region of Santiago, Selected Years, 1969-91 
(in percentages) 



Quintile 1969 1978 1988 1989 1990 1991 



1 7.7 5.2 4.4 4.6 4.9 5.5 

2 11.8 9.3 8.2 8.0 8.4 9.2 

3 15.6 13.6 12.7 11.3 11.5 12.4 

4 20.6 21.0 20.1 16.6 17.2 18.2 

5 44.5 51.0 54.6 59.5 58.0 54.7 



Source: Based on information from Joaquin Vial, Andrea Butelmann, and Carmen Celedon 
Cariola, "Fundamentos de las polfticas macroeconomicas del gobierno democratico 
chileno (1990-1993)," Coleccidn Estudios de CIEPLAN [Santiago], No. 30, Decem- 
ber 1990, 60; and La Nation [Santiago], December 27, 1992, 15. 



Table 14. Health 


Indicators, 


Selected 


Years, 1960-91 




Indicator 


I960 


1970 


1980 


1985 


1991 


Life expectancy at birth 1 


57.1 


63.6 


71.0 


71.5 


72.0 


Birthrate 2 


37.5 


26.4 


22.2 


21.6 


22.4 




12.5 


8.7 


6.6 


6.1 


5.6 




119.5 


82.0 


33.0 


19.5 


14.6 


Under age 5 mortality 4 


n.a. 


n.a. 


40.0 


26.0 5 


23.0 


Maternal mortality 3 


2.99 


1.68 


0.73 


0.47 5 


0.35 


Infant diarrhea mortality 3 


n.a. 


14.6 


1.9 


0.7 5 


0.2 


Infant bronchopneumonia 












mortality 3 


n.a. 


23.6 


3.8 


2.6 5 


1.6 


Percentage of dwellings with 












running water 


59 


67 


72 


n.a. 


n.a. 



n.a. — not available. 

1 In years. 

2 Per 1,000 population. 

3 Per 1,000 live births. 

4 Per 1,000 in 0-4 age-group. 

5 Figure for 1986. 

Source: Based on information from Chile, Instituto Nacional de Estadfsticas, Compendio 
estadistico, 1993, Santiago, 1993, Tables 122-03, 122-04, and 162-07; Chile, In- 
stituto Nacional de Estadfsticas, Informe demogrdfico de Chile: Censo 1992, Santiago, 
1993, 12, Table 2; and Ernesto Medina Lois, "Situacion de salud en Chile," in 
Jorge Jimenez de la Jara (ed.), Chile: Sistema de salud en transition a la democracia, 
Santiago, 1991, 32, Table 16. 



350 



Appendix 



Table 15. Public and Private Education 
by Education Level, 1981 and 1986 1 
(in thousands of students) 



Year and Education Level 


Public 


Private 


Total 


1981 










91 


37 


128 




1,756 


451 


2,208 




18 


1 


20 


Secondary (science and humanities) 


354 


99 


454 


Secondary (technical and professional) , 


141 


46 


187 


u: „i 




c 

3 


i iy 


Total 1981 


, . . , 2,434 


680 


3,114 


1986 










115 


95 


210 




.... 1,378 


705 


2,083 




.... 17 


13 


30 


Secondary (science and humanities) 


370 


232 


602 




80 


63 


142 


Higher , 


79 


129 


208 


Total 1986 


2,039 


1,236 


3,275 



1 Figures may not add to totals because of rounding. 

2 Basic is equivalent to primary. 



Source: Based on information from David E. Hojman, Chile: The Political Economy of De- 
velopment and Democracy in the 1990s, Pittsburgh, 1993, 38. 



Table 16. Population by Gender and Declared Religious Affiliation, 1992 



(persons over fourteen years of age) 


Religious Affiliation 


Males 


Females 


Catholic 

Other religion . , 
No religion 


3,660,367 

530,369 

39,299 

196,198 

364,582 


3,864,016 
668,016 
40,960 
213,712 
197,703 


TOTAL 


4,790,815 


4,984,407 



* For definition of Evangelical — see Glossary. 



Source: Based on information from Chile, Instituto Nacional de Estadisticas, Resultados 
oficiales: Censo de poblacion, 1992, Santiago, 1993, 29. 



351 



Chile: A Country Study 



Table 17. Opinions Regarding the Legalization of Divorce, December 1990 * 
(in percentages agreeing or disagreeing with 
the following statement: "In your opinion, 
should Chile have a law permitting 
divorce?") 



Sector 


Yes 


No 


Males 


59.2 


36.9 




52.8 


44.1 


Ages 18 to 34 


64.1 


32.3 


Ages 35 to 54 


50.7 


44.8 




43.8 


54.9 


High socioeconomic status 


70.1 


15.5 




55.8 


41.7 




52.1 


45.4 


All Catholics 


54.6 


41.1 


All Protestants 


47.2 


51.0 




39.5 


57.1 




35.5 


62.9 


CHILE 


55.6 


40.9 



* Poll conducted by Centro de Estudios Publicos and Adimark. Percentages do not add to 100.0 be- 
cause remainder had no opinion. 



Source: Based on information from Centro de Estudios Publicos, "Estudio social de opin- 
ion publica, diciembre 1990," Documento de trabajo [Santiago], No. 151, February 
1991, 61; and Arturo Fontaine Talavera and Herald Beyer, "Retrato del movi- 
miento evangelico a la luz de las encuestas de opinion publica," Estudios Publicos 
[Santiago], No. 44, Spring 1991, 95. 



352 



Appendix 



Table 18. Opinions Regarding Abortion, December 1990 * 
(in percentages responding to the following 
question: "There are different opinions 
regarding abortion. Which of 
these corresponds best with 
what you think?") 

Should Be Permitted 

To All Only in Special 





Women 


Qualified 


Should Not Be 


Sector 


Who Want It 


Cases 


Permitted 




5.8 


45.3 


47.4 


Females 


4.4 


44.3 


50.7 


Ages 18 to 34 


6.0 


46.7 


46.5 


Ages 35 to 54 


3.9 


41.8 


53.3 




4.5 


45.0 


48.5 


High socioeconomic status 


. 8.0 


78.0 


14.0 


Middle socioeconomic status 


5.7 


47.1 


45.8 




3.2 


33.5 


62.5 


All Catholics 


4.4 


48.6 


46.3 




1.9 


27.7 


69.3 


Practicing Catholics 


0.7 


40.9 


58.2 


Practicing Protestants 


0.1 


17.6 


82.3 


CHILE 


5.0 


44.7 


49.2 



* Poll conducted by Centro de Estudios Publicos and Adimark. Percentages may not add to 100.0 be- 
cause remainder had no opinion. 

Source: Based on information from Centro de Estudios Publicos, "Estudio social de opin- 
ion publica, diciembre 1990," Documento de trabajo [Santiago], No. 151, February 
1991, 63; and Arturo Fontaine Talavera and Herald Beyer, "Retrato del movi- 
miento evangelico a la luz de las encuestas de opinion publica," Estudios Publicos 
[Santiago], No. 44, Spring 1991, 96. 



Table 19. Birthrates in and out of Wedlock, Selected Years, 1965-88 



Births per 1 ,000 Population Percentage of Births 

Year In Wedlock Out of Wedlock out of Wedlock 



1965 29.3 6.2 17.5 

1970 21.5 5.3 19.8 

1975 19.6 5.0 20.3 

1980 16.3 5.9 26.6 

1985 14.8 6.9 31.8 

1988 15.6 7.8 33.5 



Source: Based on information from Ernesto Medina Lois, "Situacion de salud en Chile," 
in Jorge Jimenez de la Jara (ed.), Chile: Sistema de salud en transition a la democracia, 
Santiago, 1991, 30. 



353 



Chile: A Country Study 



Table 20. Gross Domestic Product (GDP) by Sector, 1989, 1990, and 1991 
(in millions of 1977 Chilean pesos) 1 



Sector 


1989 


1990 


1991 






39,737 


40,194 






3,964 


4,294 




35,629 


35,378 


37,060 




98,983 


99,043 


104,451 


Electricity, gas, and water 


11,575 


11,920 


12,847 




25,559 


28,247 


29,581 




84,622 


86,701 


94,196 


Transportation and communications 


30,286 


33,430 


37,419 




139,269 


141,903 


149,111 


TOTAL 


468,243 


480,323 


509,153 


Rate of growth of GDP (in percentages) 


10.0 


2.1 


6.0 



1 For value of the Chilean peso — see Glossary. 

2 Includes financial, education, and other services. 



Source: Based on information from Banco Central de Chile, Direction de Estudios, San- 
tiago (various publications). 



Table 21. Index of Manufacturing Production in Selected Sectors, 1988-92 

(1979 = 100) 



Sector 


1988 


1989 


1990 


1991 


1992 




139.5 


149.8 


142.1 


144.7 


169.3 


Textiles 


120.8 


122.4 


116.4 


126.4 


121.0 


Footwear 


71.4 


79.7 


75.5 


89.6 


92.7 




279.6 


319.7 


329.6 


329.8 


322.0 


Chemicals 


118.2 


119.8 


120.1 


129.7 


138.6 




122.1 


172.9 


171.8 


187.3 


214.8 




85.2 


107.8 


119.4 


114.6 


170.9 


Transportation equipment 


59.4 


75.3 


65.6 


70.2 


81.7 


ALL MANUFACTURING 


126.4 


137.2 


136.3 


144.5 


165.5 



Source: Based on information from Chile, Instituto Nacional de Estadfsticas, Santiago (var- 
ious publications); and Chile, Instituto Nacional de Estadfsticas, Compendio estadistico, 
1993, Santiago, 1993, Table 233-01. 



354 



Appendix 



Table 22. Mining Output, 1991 and 1992 
(in thousands of tons unless otherwise indicated) 



Mineral 


1991 


1992 


Percentage Change 




1,363.7 


1,445.0 


6.0 


Molybdenum (fine content) 


11.1 


10.4 


-6.3 


Zinc (fine content) 


22.7 


23.2 


2.2 


Manganese 


33.2 


37.4 


12.7 




6,238.1 


5,230.5 


-16.2 




19.6 


25.3 


29.1 


Silver (tons, fine content) 


431.7 


783.2 


81.4 


Lead (tons, fine content) 


817.0 


251.0 


69.2 



Source: Based on information from "Business Outlook: Chile," Business Latin America, De- 
cember 21, 1992, 3. 



Table 23. Copper Production, 1987-92 
(in thousands of tons, refined) 



1987 1988 1989 1990 1991 1992 

Refined 970.3 1,012.8 1,071.0 1,191.6 1,228.3 1,101.3 

Blister 136.6 176.6 195.6 136.9 67.8 61.6 

In bulk 311.2 261.6 342.7 259.9 518.2 781.0 

TOTAL* 1,418.1 1,451.0 1,609.3 1,588.4 1,814.3 1,943.8 



* Figures may not add to totals because of rounding. 

Source: Based on information cited by Sebastian Edwards from Comision Chilena del Cobre, 
Santiago; and Chile, Instituto Nacional de Estadfsticas, Compendio estadistico, 1993, 
Santiago, 1993, Table 232-02. 



355 



Chile: A Country Study 



Table 24. Agricultural and Forestry Exports, 1989, 1990, and 1991 
(in millions of United States dollars) 



Product 


1989 


1990 


1991 


Agriculture 








Fresh fruits 








Grapes 


273.9 


379.3 


49.5 


Other 


69.6 


361.5 


941.5 




343.5 


740.8 


991.0 


Other 


153.1 


142.7 


144.9 




496.6 


883.5 


1,135.9 


Forestry 








Basic forestry 










34.9 


50.6 


38.5 


Pulp 


39.2 


16.5 


25.8 


Other 


1.3 


9.3 


3.0 


Total basic forestry 


75.4 


76.4 


67.3 


Paper products 


422.5 


423.2 


445.6 




291.5 


370.3 


427.5 




789.4 


869.9 


940.4 


TOTAL 


1,286.0 


1,753.4 


2,076.3 



Source: Based on information cited by Sebastian Edwards from Banco Central de Chile, 
Santiago. 



Table 25. Fruit Production, Crop Years 1987-88 to 1990-91 
(in thousands of tons) 



Fruit 1987-88 1988-89 1989-90 1990-91 



Apples 630.0 660.0 690.0 750.0 

Apricots 14.5 16.0 19.5 11.2 

Avocados 28.0 39.0 37.6 39.0 

Grapes 516.0 547.0 660.0 650.0 

Lemons 60.0 72.5 86.0 88.0 

Oranges 96.0 99.0 97.2 99.0 

Peaches 92.4 97.4 112.0 113.0 

Pears 99.0 119.0 139.6 165.0 

Plums 85.0 98.5 110.0 100.0 



Source: Based on information cited by Sebastian Edwards from Chile, Instituto Nacional 
de Estadisticas, Santiago. 



356 



Appendix 



Table 26. Yields of Principal Agricultural Products, Crop Years 
1986-87 to 1990-91 
(in quintals per hectare) 



Crop 1986-87 1987-88 1988-89 1989-90 1990-91 



Barley 29.5 33.9 34.6 34.8 33.7 

Beans 9.5 13.2 11.5 12.7 13.2 

Corn 71.2 73.2 75.3 81.4 83.9 

Peas 8.6 7.8 8.9 n.a. n.a. 

Potatoes 126.0 149.8 140.6 150.3 142.2 

Rice 39.3 41.7 43.1 41.7 39.4 

Sugar beets 493.6 511.6 544.5 537.5 554.6 

Sunflowers 21.0 21.0 21.2 23.4 23.9 

Wheat 27.1 30.1 32.7 29.5 34.1 



n.a. — not available. 

Source: Based on information cited by Sebastian Edwards from Chile, Instituto Nacional 
de Estadi'sticas, Santiago. 



Table 27. Fishing Industry Exports, 1987-91 
(in millions of United States dollars) 



Product 


1987 


1988 


1989 


1990 


1991 


Agar 


14 


19 


22 


32 


28 


Crustaceans (canned) 


4 


6 


29 


28 


26 


Crustaceans (fresh and frozen) 


31 


25 


3 


3 


2 


Fish (canned) 


29 


32 


42 


42 


36 


Fish (fresh and frozen) 


110 


163 


209 


325 


407 




359 


459 


515 


380 


466 


Fish oil 


16 


23 


23 


14 


26 




... 49 


49 


41 


41 


58 


Mollusks (fresh and frozen) 


24 


37 


24 


17 


20 




9 


10 


12 


19 


18 


Other 


6 


13 


11 


15 


17 


TOTAL * 


652 


837 


932 


915 


1,104 



* Figures may not add to totals because of rounding. 



Source: Based on information from Chile, Ministry of Foreign Affairs, General Directorate 
of International Economic Relations, Export Promotion Department, ProChile [San- 
tiago], No. 43, September-October 1992, 6. 



357 



Chile: A Country Study 



Table 28. Forest Area Planted by Public Sector and Private Sector, 1982-90 

(in hectares) 



Year 


Public Sector 


Private Sector 


Total 


1982 


41 


68,545 


68,586 


1983 


21,811 


54,469 


76,280 


1984 


40,302 


53,300 


93,602 


1985 


24,193 


72,084 


96,277 


1986 


n.a. 


66.193 


66,193 


1987 




66,441 


66,441 


1988 




72,944 


72,944 


1989 


n.a. 


86,704 


86,704 


1990 


n.a. 


94,130 


94,130 



n.a. — not available. 

Source: Based on information from Banco Central de Chile, Direccion de Estudios, Indica- 
dores economicos y sociales regionales, 1980-89, Santiago, 1991, 58. 



Table 29. Electric Energy Production by Producer, 1988-92 
(in millions of kilowatts) 



Company 1988 1989 1990 1991 1992 



Chilectra 1 2,210.4 3,886.6 4,243.0 2,516.4 n.a. 

Colbun 2,510.7 2,005.4 1,926.4 2,818.3 n.a. 

ENDESA 2 7,420.0 6,648.9 6,607.5 6,434.1 n.a. 

Pilmaiguen 202.4 231.4 269.2 2.315.0 n.a. 

Pullingue 169.1 170.0 228.8 209.8 n.a. 

Other 4,384.0 4,785.2 5.046.5 5,514.0 n.a. 



TOTAL 16.896.6 17,727.5 18.321.4 19,807.6 22,167.3 



n.a. — not available. 

1 Compania Chilena de Electricidad (Chilean Electric Company). 

2 Empresa Nacional de Electricidad (National Electric Company). 

Source: Based on information cited by Sebastian Edwards from Chile, Instituto Nacional 
de Estadisticas, Santiago; and Chile, Instituto Nacional de Estadisticas, Compendio 
estadistico, 1993 ; Santiago. 1993. Table 234-01. 



358 



Appendix 



Table 30. Public-Sector and Private-Sector Construction, 1987-91 
(in square meters) 



Sector 1987 1988 1989 1990 1991 



Public sector 

Housing 91,677 98,797 72,550 13,396 35,357 

Industry 14,512 6,347 9,125 24,696 24,581 

Services 168,337 148,439 145,188 139,929 177,772 

Total public sector . 274,526 253,583 226,863 178,021 237,710 

Private sector 4,498,966 5,331,605 6,309,495 6,065,258 7,404,551 



TOTAL 4,773,492 5,585,188 6,536,358 6,243,279 7,642,261 



Source: Based on information cited by Sebastian Edwards from Chile, Instituto Nacional 
de Estadfsticas, Santiago. 



359 



Chile: A Country Study 



Table 31. Key Economic Indicators, 1988-92 

1988 1989 1990 1991 1992 

Gross domestic product (GDP; in millions 

of United States dollars) 29,698 32,289 33,297 35,297 33,700 

Real GDP growth (in percentages) 7.4 10.0 2.1 6.0 10.4 

Consumer price inflation (average 

annual percentage) 12.7 21.4 27.3 18.7 12.7 

Population (in millions) 12.8 13.0 13.0 13.2 13.4 

GDP per capita (in United States 

dollars) 2,330 2,520 2,527 2,637 2,515 

Exports, f.o.b. (in millions of United 

States dollars) 1 7,052 8,080 8,310 8,929 9,986 

Imports, f.o.b. (in millions of United 

States dollars) 4,833 6,502 7,037 7,353 9,237 

Current account (in billions of United 

States dollars) -0.17 -0.77 -0.82 0.09 -0.50 

Reserves, excluding gold (in billions 

of United States dollars) 3.16 3.60 6.07 7.04 9.17 

Total external debt (in billions of 

United States dollars) 19.0 17.4 18.6 17.4 18.9 

Debt-service ratio (in percentages) 26.9 27.7 25.9 21.5 18.6 

Exchange rate (average, Chilean pesos 

to United States dollar) 2 245.1 267.2 305.1 349.4 362.6 

Investment (as a percentage of GDP, 

in constant Chilean pesos) 17.0 18.6 19.5 18.2 23.0 

1 f.o.b. — free on board. 

2 For value of the Chilean peso — see Glossary. 

Source: Based on information from Economist Intelligence Unit, Country Report: Chile 
[London], No. 2, 1993, 3; Inter-American Development Bank, Economic and Social 
Progress in Latin America: 1992 Report, Washington, October 1992, 286; and Inter- 
American Development Bank (various other sources). 



360 



Appendix 



Table 32. Direction of Trade, 1989-92 
(in millions of United States dollars) 

Country 1989 1990 1991 1992 



Exports, f.o.b. 1 



Argentina 


110 


114 


257 


462 






243 


235 


172 






487 


448 


451 


Britain 


499 


559 


408 


572 


China 


53 


31 


79 


262 










9.QC 

oyo 


Germany 2 


914 


941 


709 


604 






40 


58 


135 


Italy 


410 


402 


345 


388 


Japan 




1 ,388 


1 ,644 


1,707 








30J 


334 






74 


146 


1 73 


South Korea 


....... 258 


259 


263 


243 






oco 
zoo 




JO/ 




a nn 


OOA 
ZOU 


one 


491 


United States 


1,456 


1 ,469 


1 ,596 


1 ,649 


mports, c.i.f. 3 










Argentina 


399 


503 


554 


634 




7ft*? 


JOt 


oyo 


QQfi 

yyo 






180 


163 


187 


Canada 


107 


224 


157 


149 


China 


n.a. 


n.a. 


n.a. 


146 


France 


223 


297 


241 


282 


Gabon 


33 


203 


169 


152 


Germany 2 


483 


523 


498 


630 


Italy 


153 


193 


177 


273 


Japan 


737 


568 


646 


965 


Mexico 


117 


101 


138 


178 




141 


259 


199 


324 


South Korea 


165 


123 


168 


250 




157 


159 


148 


224 




83 


82 


112 


160 


United States 


1,348 


1,373 


1,582 


1,985 



n.a. — not available. 

1 f.o.b. — free on board. 

2 Includes only West Germany until July 1990; then includes former East Germany. 

3 c.i.f. — cost, insurance, and freight. 

Source: Based on information from Economist Intelligence Unit, Country Report: Chile [Lon- 
don], No. 3, 1993, 7; and Business Latin America, April 1993, 11. 



361 



Chile: A Country Study 



Table 33. Public-Sector Finance, 1990-93 
(in percentages of GDP) 1 





1990 


1991 


1992 


1993 2 


Central government 










Revenues 










Current 










Tax revenues 


14.5 


16.9 


17.5 


18.5 


Copper revenues (net) 


1.6 


1.1 


1.3 


0.8 


Other 


4.5 


4.6 


4.6 


5.0 


Total current 


20.6 


22.6 


23.4 


24.3 


Capital 


1.4 


1.2 


1.1 


1.0 


Total revenues 


22.0 


23.8 


24.5 


25.3 


Expenditures 










Current 


18.2 


19.0 


18.2 


19.2 




3.1 


3.3 


4.0 


4.3 




21.3 


22.3 


22.2 


23.5 


Overall surplus 


0.7 


1.5 


2.3 


1.8 


Savings 


2.4 


3.6 


5.2 


5.1 




2.8 


0.6 


0.7 


0.5 


Nonfinancial public sector, overall surplus 


3.5 


2.1 


3.0 


2.6 


Operational deficit of Central Bank (cash basis) 3 . . 


. -2.2 


-1.1 


-1.2 


-1.0 


Consolidated public sector, overall balance 


1.3 


1.0 


1.8 


1.3 



1 GDP — gross domestic product. 

2 Preliminary. 

3 For explanation of Central Bank — see Glossary. 



Source: Based on information provided by Sebastian Edwards from World Bank, Wash- 
ington. 

Table 34. Electoral Results for the Chamber of Deputies, March 1973 1 

Number of 

Ideological Orientation Number of Percentage of Deputies 

and Party Votes Total Votes Elected 



Right 



National Partv 2 


777,084 


21.1 


32 


Center 








Radical Partv 3 


133,751 


3.6 


19 


Christian Democratic Partv 4 


1,049,676 


28.5 


55 




1,183,427 


32.1 


74 


Left 








Socialist Party 5 


678,674 


18.4 


15 




595,829 


16.2 


22 


Total left 


1,274,503 


34.6 


37 


TOTAL 


2,535.014 


87.8 


143 



1 Parties listed are those that obtained more than 5 percent of the total vote in more than one congres- 
sional election. 

2 Partido Nacional (PN). In 1973 the National Party was the principal right-wing party. 

3 Partido Radical (PR). 

4 Partido Democrata Crisnano (PDC). 

5 Partido Socialista (PS). 

6 Partido Comunista de Chile (PCCh). 

Source: Based on information from Chile, Direccion del Registro Electoral, Santiago. 



362 



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364 



Appendix 



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365 



Chile: A Country Study 



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366 



Appendix 



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367 



Chile: A Country Study 

Table 39. National- Level Results of the Municipal Elections of June 23, 1992 



Coalitions, Subpacts, and Parties Number of Votes Percentage 



Concertacion por la Democracia 1 



Subpact PDC-PR-PSD-AHV 





1 ftS^ 1 37 

1 ,OvJxJ ,1J/ 


9H Q 


Partido Radical (PR) 3 


314 759 


4.9 


Partido Social Democratico (PSD) 4 


26,788 


0.4 




52 481 


P. 
u.o 


Total Snhnart PDC-PR -PSD- AHV 


2 249 165 


35 1 


Snhnart PPD-PS 

uuuuati x x J—/ x o 






Partido por la Democracia (PPD) ^ 


590,547 


9.2 


Partido Socialista (PS) 7 


547,079 


8.5 


Independents 


31,106 


0.5 


Total Subpact PPD-PS 


1,168,732 


18.2 


Total Concertacion por la Democracia 


3,417,897 


53.3 


Partido Comunista de Chile 8 


'419|478 


6.5 




15,505 


0.2 


Participacion y Progreso 10 








860,808 


13.4 




4,145 


0.1 


Union Democrata Independiente 13 


652,668 


10.2 


Independents 


383,066 


6.0 




-1,900,687 


29.7 


Union de Centro Centro 14 


519,017 


8.1 


Independent candidates 


136,826 


2.1 


TOTAL 15 


6,409,410 


100.0 



Number of voting tables: 25,211 (each voting table contains approximately 350 voters) 
Number of voting sites: 1,626 
Registered males: 3,791,364 
Registered females: 4,048,644 
Total registered: 7,840,008 



1 Coalition for Democracy, an alliance of left-of-center parties. 

2 Christian Democratic Party. 

3 Radical Party. 

4 Social Democratic Party. 

5 Humanist-Green Alliance, a party. 

6 Party for Democracy. 

7 Socialist Party. 

8 Communist Party of Chile, running under the Allendista Movement of the Democratic Left (MIDA). 

9 Liberal Party. 

10 Participation and Progress, an alliance of right-of-center parties. 

11 National Renewal. 

12 National Party. 

13 Independent Democratic Union, a party. 

14 Union of the Centrist Center, a party. 

15 Figures may not add to totals because of rounding. 

Source: Based on information from Chile, Ministry of Interior, Santiago. 



368 



Appendix 



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369 



Chile: A Country Study 



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370 



Appendix 



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371 



Chile: A Country Study 



Table 43. Major Army Equipment, 1993 



Type and Description 



Country 
of Origin 



In Inventory 



Light tanks 

AMX-13 France 

M-41 United States 

M-24 -do- 
Medium battle tanks 

AMX-30 France 

M4A3/M51 Israeli-modified 

Super-Sherman United States/Israel 

Armored personnel carriers 

EE-9 Cascavel Brazil 

EE- 11 Urutu -do- 

M-113A1 United States 

Famae-Mowag Piranha 8x8 Chile/Switzerland 

Cardoen-Mowag Piranha 6x6 -do- 
Armored infantry fighting vehicles 

Mowag Piranha with 90mm gun -do- 
Mortar carriers 

Cardoen-Mowag Piranha 120mm -do- 
Mortars 

60mm M-19 United States 

81mm M-29 -do- 

Famae 60mm Chile 

Famae 81mm M-l -do- 

Famae 107mm -do- 

Famae 120mm (50 self-propelled) -do- 

Hotchkiss-Brandt MO-120-M65 France 

Recoilless launchers (150 total) 

57mm M-18 United States 

75mm M-18 -do- 

89mm M-20 3.5-inch -do- 

M40A1 106mm recoilless launcher -do- 
Light antitank guided weapons (3,000 total) 

Milan 120mm France/Germany 

Mamba Germany/South Africa 

Armbrust 300 80mm Germany 

Air defense weapons 

HSS-639 single 20mm gun Switzerland 

Oerlikon K 63 twin 20mm gun -do- 

35mm twin n.a. 

L/70 40mm (in storage) n.a. 

Blowpipe SAM missile launchers Britain 



47 
50 
60 



21 



150 



200 
300 
60-100 
50 
180 



20 



50 



n.a. 
300 
n.a. 
n.a. 

15 
110 
n.a. 



n.a. 
n.a. 
n.a. 
n.a. 



n.a. 
n.a. 
n.a. 



100 
100 
24 
6 

50 



372 



Appendix 



Table 43. — Continued 



Type and Description 



Country 
of Origin 



In Inventory 



Fire-support vehicles 

Cardoen-Mowag Piranha with 90mm 

gun -do- 20 

Artillery 

M-101 105mm United States 74 

Oto Melara Model 56 105mm Italy 36 

Soltam M-68 155mm towed howitzer . . . Israel 30 

Mk F3 SPH 155mm France 10 

LFH-18 105mm towed howitzer Germany n.a. 

Fixed-wing aircraft 

CASA CN-235 Spain 3 

CASA C-212 Aviocar . -do- 6 

PA-31 Piper Navajo United States 3 

PA-28 Piper Dakota , -do- 8 

Cessna O-l -do- 4 

Cessna 337G -do- 3 

Cessna Citation (VIP) -do- 1 

Cessna R172K -do- 16 

Cessna R172 (training) -do- 16 

Dassault-Breguet Falcon 200 France 1 

DHC-6 Canada 4 

Helicopters 

Bell UH-1H United States 3 

Bell 206B -do- 2 

Hughes 530F (armed training) -do- 5 

Aerospatiale AS-332B Super Puma .... France 3 

Aerospatiale SA-330 Puma -do- 9 

Aerospatiale SA-315B Lama -do- 10 

Enstrom 280 FX n.a. 14 

n.a. — not available. 

Source: Based on information from The Military Balance, 1993-1994, London, 1993, 179-80; 

and "World Defence Almanac, 1992-93: The Balance of Military Power," Mili- 
tary Technology [Bonn], 18, No. 1, January 1993, 44. 



373 



Chile: A Country Study 



Table 44. Major Naval Equipment, 1993 



In Inventory 



Country 

Type and Description of Origin 

Navy 

Missile destroyers 

County-class Britain 

Almirante Williams-class 

(soon to be retired) -do- 
Missile frigates 

Leander-class -do- 
Submarines 

Oberon-class -do- 

IKL Type 209/1400 Germany 

Fast transports 

Charles Lawrence-class United States 

Missile attack craft 

Reshev (Sa'ar IV)-class Israel 

Sa'ar Ill-class -do- 
Torpedo attack craft 

Guacolda (Liirssen)-class Germany 

Large patrol boats 

PC-1638-class submarine chaser United States 

Dabur-class Israel 

Project Taitao Micalvi-class Chile 

Corvettes 

Abnaki-class former fleet tug United States 

Amphibious 

Maipo (French Batral) medium 

landing ship (LSM) France 

Elicura-class LSMs Chile 

Sail training ships 

Four-masted schooner Spain 

Submarine depot ships 

2,600 tons Germany 

Transports 

2,600 tons Chile 

Armed tugs 

Cherokee-class ATF United States 

Surveying vessels 

Cherokee-class ATF -do- 



374 



Appendix 



Table 44. — Continued 



Type and Description 



Country 
of Origin 



In Inventory 



Naval Aviation 

Aircraft 

EMB-111 AN Bandeirante Brazil 

EMB-110 CN Bandeirante -do- 

CASA-212 Aviocars Spain 

A-36 Halcon (C-101) Chile/Spain 

Piper PA-31 Navajo United States 

Pilatus PC-7 Switzerland 

Dassault-Breguet Falcon 200 France 

P-3 Orion n.a. 

IAI-1124 Israel 

Helicopters 

AS-332 Super Puma France 

AS-365 Dauphins -do- 

Alouette-III -do- 

SA-316 -do- 

SA-319B Alouette III -do- 

MBB Bo- 105 Germany 

Bell 206B Jet Ranger United States 

Bell 476 -do- 

EMB-111AN Brazil 

Marines 

Small patrol craft n.a. 

Amphibious 

Transport landing vehicle, tracked, 

personnel (LVTP-5) n.a. 

Armored personnel carriers 

Mowag Roland with Blowpipe SAMs France 

Towed artillery 

M-101 105mm howitzers United States 

M-114 155mm -do- 
Coast guns 

GPFM-3 155mm -do- 
Mortars 

50mm -do- 

80mm -do- 
Service craft n.a. 

Rescue craft n.a. 

Coast Guard 

Large patrol boats 

Protector-class Britain/Chile 

Small patrol vessels 

Anchova-class Brazil 



10 



30 



40 



16 

36 



16 



50 
50 
3 

13 



10 



375 



Chile: A Country Study 



Table 44. — Continued 





Country 




Type and Description 


of Origin 


In Inventory 


Ona-class 


Chile 


2 


Service launch for search-and-rescue at 








-do- 


1 




-do- 


1 


Fast launch 


-do- 


1 




Brazil 


2 




Chile 


10 



n.a. — not available. 



Source: Based on information from The Military Balance, 1993-1994, London, 1993, 179-80; 
Combat Fleets of the World, 1993, Ed., Bernard Prezelin, Annapolis, 1993, 79-86; 
and Jane's Fighting Ships, 1993-94, London, 1993, 103-13. 



376 



Appendix 



Table 45. Major Air Force Equipment, 1993 



Type and Description 



Country 
of Origin 



In Inventory 



Fighters 

Northrop F-5E 

Northrop F-5F 

Dassault Mirage 50CH 

Dassault Mirage DCH 

Dassault Mirage FCH (Panteras) . 

Enaer/Dassault Pantera 50C 

Hawker Hunter FGA-9 

Hawker Hunter F-71 

Hawker Hunter FR-71 

Hawker Hunter T-72 

Strike aircraft 

Enaer/CASA T-36 Halcon trainers 
and A-36 light-strike aircraft . . . 
Cessna A-37B 

Reconnaissance aircraft 

Canberra PR-9 

Gates Learjet 35A 

King Air A-100 

Airborne early warning 

Boeing 707 Phalcon AEW system . 

Transports 

Boeing 707-320, 707-321, 707-331 

Lockheed C-130B 

Lockheed C-130H 

Beech King E 99 

King Air, 2 B 200 

Super King Air 

DHC-6-300 Twin Otter 

CASA 212 

Helicopters 

Aerospatiale SA-315B Lama 

Aerospatiale AS-330 Puma 

Bell UH-1D, UH-1H 

Bell 212 

MBB BK-117 

MBB Bo-105CB 

Trainers 

Enaer/CASA T-36 

Enaer T-35A, T-35B Pillan 

Cessna T-37B, T-37C 

Support 

Beech Baron 

Beech 99A Petrel 

Cessna L-19 

Piper PA-28-326 Dakota 

Extra-300 



United States 

-do- 
France 

-do- 

-do- 
Chile/France 
Britain 

-do- 

-do- 

-do- 



Chile/Spain 
United States 



Britain 
United States 
-do- 



Israel/Chile 



United States 
-do- 
-do- 
-do- 
-do- 
-do- 
Canada 
Spain 



France 
-do- 
United States 
-do- 
Germany 
-do- 



Chile/Spain 

Chile 
United States 



-do- 
-do- 
-do- 
-do- 
Germany 



13 
3 
6 
1 
8 
6 
8 

18 
4 
3 



20 
30 



4 
3 
2 
9 

n.a. 

3 

14 

2 



5 
1 
14 
n.a. 
1 
6 



20 
48 
26 



377 



Chile: A Country Study 
Table 45. — Continued 



Country 

Type and Description of Origin In Inventory 



Air defense 



20mm S-639/-665 


n.a. 


n.a. 


20mm GAl-COl twin 


n.a. 


n.a. 


35mm Oerlikon K-63 twin 


Switzerland 


36 


Oerlikon K63 twin 35mm gun systems . . 


-do- 


n.a. 


Samantha/Mistral/Mygale systems 


France 


12 




-do- 


n.a. 


20mm Famil FAM-2M twin 


Chile 


n.a. 


AS- 11/- 12 air-to-surface 


n.a. 


n.a. 


AIM-90 Sidewinder, Shafir 


United States/Israel 


n.a. 



Airfield defense vehicles 

VTP-2 Chile n.a. 

Carancho 180 -do- n.a. 

n.a. — not available. 

Source: Based on information from The Military Balance, 1993-1994, London, 1993, 179-80; 
and International Military and Defense Encyclopedia, 2, Washington, 1993, 489. 



Table 46. Major Carabineros Equipment, 1993 



Type and Description 



Country 
of Origin 



In Inventory 



Armored personnel carriers 

Mowag Roland (6x6) Chile/Switzerland 20 

Mortars 

60mm n.a. n.a. 

80mm n.a. n.a. 

Fixed-wing aircraft 

Swearingen SA-226TC Metro United States 4 

Piper Navajo twin -do- 4 

Cessna 182Q -do- 4 

Cessna 206 -do- 2 

Cessna 210-M Centurion II -do- 2 

Helicopters 

MBB Bo-105C, B0-IO6CB, and 

Bo-105LS Germany 12 

Bell 206L3 United States 2 

n.a. — not available. 

Source: Based on information fron The Military Balance, 1993-1994, London, 1993, 181; 

and "World Defence Almanac, 1992-93: The Balance of Military Power," Mili- 
tary Technology [Bonn], 17, No. 1, January 1993, 47. 



378 



Appendix 



Table 47. National Crime Statistics, Selected Years, 1980-91 



Year Robberies Burglaries Rapes Murders 



1980 31,679 15,514 694 213 

1981 29,896 13,927 709 190 

1982 36,570 14,292 820 290 

1986 71,150 22,066 783 288 

1987 67,775 22,949 829 285 

1988 60,659 19,789 765 292 

1989 61,018 17,646 582 269 

1990 76,709 19,118 753 385 

1991 * 87,546 20,132 735 339 



* Annualized projections made in early November 1991. 

Source: Unpublished report submitted by the Carabineros to the government of Chile, 
November 1991. 



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Chapter 5 

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Andrade, John. "Chile." Pages 94-134 in John Andrade (ed.), 
Latin American Military Aviation. Earl Shilton, United Kingdom: 
Midland Counties Publications, 1982. 

Bragg, R.J., and Roy Turner. Parachute Badges and Insignia of the 
World. Poole, United Kingdom: Blandford Press, 1979. 

Bustamente, Fernando, Miguel Navarro, and Guillermo Patillio. 
^Cual debe ser el gasto militar en el Chile de los 90? Santiago: Editori- 
al Atena, 1991. 

Campbell, Bert, and Ron Reynolds. Marine Badges and Insignia of 

the World. London: Blandford Press, 1983. 
Cavalla Rojas, Antonio. Fuerzas armadas y defensa national. Culia- 

can, Mexico: Universidad Autonoma de Sinaloa, 1981. 



413 



Chile: A Country Study 



Chile. Armada de Chile. Orientacion profesional. Valparaiso: 1979. 
Ejercito de Chile. Historia militar de Chile. Santiago: Esta- 

do Mayor General del Ejercito, 1984. 
" Chile." 'Pages 103-113 in Jane's Fighting Ships, 1991-94. (Ed., 

Richard Sharpe.) London: Jane's, 1993. 
"Chile." Pages 46-48 in "World Defence Almanac 1992-93: The 

Balance of Military Power," Military Technology [Bonn], 17, No. 

1. January 1993. 
Combat Fleets of the World, 1993: Their Ships, Aircraft, and Armament . 

(Ed.. Bernard Prezelin.) Annapolis: Naval Institute Press, 1993. 
Conway's All the World's Fighting Ships, 1860-1905/1922-1982. (5 

vols.) London: Conway Maritime Press, 1979-83. 
* 'Edicion especial: La creacion de la Fuerza Aerea de Chile, ' ' Revista 

Fuerza Aerea de Chile [Santiago], 39, No. 152, January-March 

1980. 

English, Adrian J. "Chile." Pages 132-63 in Adrian J. English 
(ed.). Armed Forces of Latin America: Their Histories, Development, 
Present Strength, and Military Potential. London: Jane's, 1984. 

. "Chile.'' Pages 76-100 in Regional Defence Profile: Latin 

America. London: Jane's, 1988. 

. "^Chile: Pariah o martir?" Defensa Latinoamericana 

[Maidenhead, United Kingdom], June 1986, 6-9. 

. "The Chilean Coast Guard, ' ' Navy International [Haskmere, 

United Kingdom]. 91. No. 11, November 1986, 675. 

. ' 'Chilean Forces Are Among Latin America's Best, ' ' Jane's 

Defence Weekly [London]. 4. No. 18, November 1985, 972-73. 

. "The Chilean Navy," Navy International [Newdigate, Unit- 
ed Kingdom]. 87. No. 4, 1982. 966-70. 

"Defence in Chile, ' ' International Defence Review [Geneva] , 

No. 2, February 1988. 135-38. 

. "La industria de equipos de defensa de Chile," Defensa 

Latinoamericana [Maidenhead, United Kingdom]. June 1986, 
10-12. 

"Perfil: Chile — sus fuerzas armadas y su defensa," Tec- 

nologia Militar [Bonn]. June 1990. 30-37. 

. "Los 60 anos de la Fuerza Aerea de Chile, ' ' Iberoamericana 

de Tecnologias [Bonn], February 1990. 42-45. 

Faundes Merino, Juan Jorge. Cardoen: ^Industrial o traficante. 3 Bue- 
nos Aires: Grupo Editorial Zeta, 1991. 

Fauriol, Georges (ed.). Latin American Insurgencies. Washington: Na- 
tional Defense University, 1985. 

Fuentes, Claudio. and Augusto Yaras. Defensa Nacional: Chile, 
1990-94. Santiago: Facultad Latinoamericana de Ciencias So- 
ciales Serie Libros. 1994. 



414 



Bibliography 

Fuenzalida Bade, Rodrigo. La armada de Chile desde la alborada al 
sesquicentenario, 1813-1968. (2d ed.) (4 vols.) Santiago: Talleres 
Empresa Periodistica "Aqui Esta," 1978. 

Galuppini, Gino. Warships of the World. New York: Military Press, 
1989. 

Garcia Ziemsen, Gustavo. "La Fuerza Aerea de Chile," Tecnolo- 
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Green, William, and John Fricker. The Air Forces of the World. Lon- 
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Gumucio, Mariano Baptista. Historia grdfica de la Guerra del Pacifi- 
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Hillmon, Tommie. A History of the Armed Forces of Chile. Syracuse: 
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Hunter, Brian (ed.). "Chile." Pages 349-54 in The Statesman's Year- 
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Ingleton, RoyD. Police of the World. Shepperton, United Kingdom: 
Ian Allen, 1979. 

International Military and Defense Encyclopedia, 2. Washington: Bras- 
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Jane's Armour and Artillery, 1990-1991. London: Jane's, 1990. 

Jane's Fighting Ships, 1993-94. London: Jane's, 1993. 

Jarpa Gerhard, Sergio. "Campana maritima de 1879," Revista de 
Marina [Valparaiso], 98, No. 744, 1981, 553-62. 

Keegan,John. "Chile." Pages 105-9 in John Keegan (ed.), World 
Armies. London: Macmillan, 1983. 

Kurian, George Thomas. "Chile." Pages 61-63 in George Thom- 
as Kurian (ed.), World Encyclopaedia of Police Forces and Penal Sys- 
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Lopez, Jacinto. Historia de la guerra del guano y el salitre. Lima: Editorial 
Universo, 1980. 

Marambio, Cristian. "La Armada de Chile," Tecnologia Militar 

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Marquez Alison, Alberto, and Antonio Marquez Alison. Cuatro 

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415 



Chile: A Country Study 



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Bibliography 

Worchester, Donald E. Sea Power and Chilean Independence. Gaines- 
ville: University of Florida Press, 1962. 

"World Defence Almanac. 1992-93: The Balance of Military Pow- 
er," Military Technology [Bonn], 17, No.l, January 1993, 47. 



417 



Glossary 



Alliance for Progress — Established in 1961 at a hemispheric meet- 
ing in Punta del Este, Uruguay, under the leadership of Presi- 
dent John F. Kennedy as a long-range program to help develop 
and modernize Latin American states through multisectoral 
reforms, particularly in health and education. Involved vari- 
ous forms of foreign aid, including development loans offered 
at very low or zero interest rates, from the United States to 
all states of Latin America and the Caribbean, except Cuba. 

Andean Group — An economic group, also known as the Andean 
Pact or the Andean Common Market, created in 1969 by 
Bolivia, Chile, Colombia, Ecuador, and Peru (Venezuela joined 
in 1973) as a subregional market to improve its members' bar- 
gaining power within the Latin American Free Trade Associ- 
ation (LAFTA — q. v.). Its commission meets three times a year 
to encourage increased trade and more rapid development and 
to plan and program economic subregional integration. Chile 
left the Andean Group in 1976. 

Andean Pact — See Andean Group. 

audiencia — A high court of justice, exercising some administrative 
and executive functions in the colonial period. 

balance of payments — An annual statistical summary of the mone- 
tary value of all economic transactions between one country 
and the rest of the world, including goods, services, income 
on investments, and other financial matters, such as credits or 
loans. 

binomial electoral system — In this unique system, which governs 
Chile's congressional elections, political parties or groupings 
form pacts and permit slates (two candidates per slate), from 
which two senators and two deputies are elected from each dis- 
trict. By requiring each party to obtain two-thirds of the vote 
in each district for the successful election of its two candidates 
to the legislature, this system gives the opposition dispropor- 
tionate representation in Congress. 

capital account — A section of the balance of payments accounts 
that records short-term and long-term capital flows. 

capital formation — Creation of new capital or the expansion of ex- 
isting capital, during a fiscal period, normally financed by 
savings. 

capital goods — A factor-of-production category consisting of manu- 
factured products used in the process of production. 



419 



Chile: A Country Study 



capital-intensive — A high ratio of capital to labor and other 
resources used in the production process. 

capital market — An institutional system of communications, vest- 
ed largely in the security exchanges, where lenders and bor- 
rowers interact with a view to transacting or trading. 

Central Bank of Chile — Chile's Central Bank, as is usually the case 
with central banks in general, is a federal, government-related 
institution entrusted with control of the commercial banking 
system and with the issuance of the currency. Responsible for 
setting the level of credit and money supply in an economy and 
serving as the bank of last resort for other banks. Also has a 
major impact on interest rates, inflation, and economic out- 
put. Under Article 97 of the constitution, the Central Bank 
of Chile is an autonomous institution. 

"Chicago boys" — A pejorative expression coined in the early years 
of the Pinochet regime to refer to those University of Chicago- 
trained or -affiliated economists, including Milton Friedman 
and Arnold Harberger, who recommended and implemented 
the liberalization and stabilization policies of the military 
government. However, because many other respected econom- 
ists have since advocated free-market policies, the term has be- 
come misleading. Furthermore, economist David E. Hojman 
has pointed out that the model advocated by the "Chicago 
boys" characterized Chilean policy making for many decades 
and thus was not particularly extraneous to Chilean institu- 
tions and traditions. 

Chilean peso (Ch$) — Chile's currency. Replaced escudo on Sep- 
tember 29, 1975, at a rate of 1,000 escudos per peso. Peso notes 
are for 500, 1,000, 5,000, and 10,000 pesos; coins are for 1, 
5, 10, 50, and 100 pesos. Official exchange rate of Chilean peso 
was pegged to United States dollar until July 3, 1992, at a rate 
adjusted at daily intervals and determined by monthly rates 
of national and world inflation. On January 26, 1992, the Cen- 
tral Bank of Chile (q.v.) revalued the peso, reducing the offi- 
cial dollar exchange rate by 5 percent, which meant it dropped 
from 395 to 375 pesos. On July 3, 1992, the Central Bank, 
in a move designed to halt currency speculation, announced 
the peso would no longer be measured exclusively against the 
United States currency, but rather would use a basket of the 
United States dollar, the German deutsche mark, and the 
Japanese yen in a 50-30-20 ratio. On September 13, 1994, 
Ch$405.9 = US$l. 

Christian Base Communities (Comunidades Eclesiasticas de Base — 
CEBs) — Groups consisting of mostly poor Christian lay people 



420 



Glossary 



through which advocates of liberation theology (q.v.) mainly 
work. Members of CEBs meet in small groups to reflect on 
Scripture and discuss the Bible's meaning in their lives. They 
are introduced to a radical interpretation of the Bible, one em- 
ploying Marxist terminology to analyze and condemn the wide 
disparities between the wealthy elite and the impoverished mass- 
es in most underdeveloped countries. This reflection often leads 
members to organize and improve their living standards 
through cooperatives and civic-improvement projects. 
Communist International (Comintern)- — The Russian Communist 
Party founded the Communist International (Comintern) in 
Moscow in March 1919 for the purpose of rallying socialists 
and communists. The Comintern adopted Leninist principles 
and rejected reformism in favor of revolutionary action against 
capitalist governments. Disbanded in May 1943 and replaced 
by the Communist Information Bureau (Cominform) in Sep- 
tember 1947. 

communitarianism — The Christian Democrats supported unioni- 
zation of the peasantry through communitarianism rather than 
Marxism. According to political scientist Paul E. Sigmund, 
whereas in the early decades of their party Chile's Christian 
Democrats preferred to describe their program simply as com- 
munitarian instead of as socialist, after the election of Salvador 
Allende Gossens as president in 1970 they described it as "com- 
munitarian socialism," as opposed to Allende's statist socialism. 

consumer price index (CPI) — A statistical measure of sustained 
change in the price level weighted according to spending 
patterns. 

corporatism — A sociopolitical philosophy that is antithetical to both 
Marxist and liberal democratic political ideals. It found its most 
developed expression in Italy under Benito Mussolini. A cor- 
poratist would organize society into industrial and profession- 
al corporations that serve as organs of political representation 
within a hierarchical, centralized polity controlled by the state. 
A corporatist society is elitist, patrimonialist, authoritarian, and 
statist. Some social science theorists have argued that Latin 
American political tradition has had a fundamentally corporatist 
nature, but others argue that it is but one of many cultural in- 
fluences in the region. 

Economic Commission for Latin America (EC LA) — See Economic 
Commission for Latin America and the Caribbean (ECLAC). 

Economic Commission for Latin America and the Caribbean 
(ECLAC) — A United Nations regional economic commission 
established on February 25, 1948, as the Economic Commission 



421 



Chile: A Country Study 



for Latin America (EC LA). More commonly known in Latin 
America as the Comision Economica para America Latina 
(CEPAL). In 1984 it expanded its operations and name to in- 
clude the Caribbean. Its main functions are to initiate and coor- 
dinate policies aimed at promoting economic development. In 
addition to the countries of Latin America and the Caribbe- 
an, ECLAC's forty-one members in 1992 included Britain, 
Canada, France, the Netherlands, Portugal, Spain, and the 
United States. There were an additional five Caribbean associ- 
ate members. 

encomenderos — Colonial grantees, usually large landowners, to rights 
over native American labor and tribute in exchange for assum- 
ing responsibility to protect and Christianize these native 
subjects. 

encomienda — A system or legal arrangement adopted by Spain in 1 503 
whereby the Spanish crown assigned rights over native Ameri- 
can labor and tribute in the Spanish American colonies to in- 
dividual colonists {encomenderos — q. v. ) in return for protecting and 
Christianizing their subjects. However, most native Americans 
ended up as virtual slaves with no recognized rights. Not to be 
confused with the landed estate (latifundio — q.v.), the encomien- 
da system was not ended until late in the eighteenth century. 

escudo — See Chilean peso. 

Evangelical — Term used in Chile to refer to all non-Catholic Chris- 
tian churches with the exception of the Orthodox Church 
(Greek, Serbian, and Armenian) and the Mormon Church. 
Most Evangelicals are Pentecostal. Some would say "Protes- 
tant" refers to non-Pentecostal churches of the Reformation, 
but they themselves (i.e., the Methodists and Presbyterians) 
also identify with the term "Evangelical." The 1992 census 
used both "Protestant" and "Evangelical" to ask about 
religion, but the difference is meaningless. Pastors of all denomi- 
nations urged people to say they were "Evangelicals." 

extreme poverty — The Chilean government defines poor people 
as those who do not earn enough in a year to cover twice the 
cost of the canasta bdsica (basic basket). The extremely poor are 
those who simply cannot buy the canasta bdsica. 

factor markets — Producer goods markets in which factors of 
production — inputs such as land, labor, capital, entrepreneur- 
ship, and other material instruments used in the production 
of goods and services — are procured. 

Gini coefficient — A measure of inequality in a country's wealth 
distribution. It contrasts actual income and property distribution 
with perfectly equal distribution. The value of the coefficient, 



422 



Glossary 



or index, can vary from (complete equality) to 1 (complete 
inequality). 

Great Depression — The 1929-34 economic slump in North America 
and other industrialized areas of the world, precipitated by the 
collapse of the United States stock market in October 1929. 
The term "depression" denotes, in its economic sense, a cy- 
clical phase of the economy with high unemployment of labor 
and capital, business and consumer pessimism, accumulated 
inventories, minimal investment, and, in some sectors, falling 
prices. 

gross domestic product (GDP) — The broadest measure of the to- 
tal value of goods and services produced by the domestic econ- 
omy during a given period, usually a year. GDP has mainly 
displaced a similar measurement, the gross national product 
(GNP — q. v.). GDP is obtained by adding the value contribut- 
ed by each sector of the economy in the form of profits, com- 
pensation to employees, and depreciation (consumption of 
capital). The income arising from investments and possessions 
owned abroad is not included, hence the use of the word domestic 
to distinguish GDP from GNP. Real GDP adjusts the value 
of GDP to exclude the effects of price changes, allowing for 
measurement of actual yearly increases or decreases in output. 

gross national product (GNP) — Total market value of all final goods 
(those sold to the final user) and services produced by an econ- 
omy during a year, plus the value of any net changes in in- 
ventories. Measured by adding the gross domestic product 
(GDP — q.v.), net changes in inventories, and the income 
received from abroad by residents, less payments remitted 
abroad to nonresidents. 

human development index (HDI) — A measurement of human 
progress introduced by the United Nations Development 
Programme (UNDP) in its Human Development Report, 1990. By 
combining indicators of real purchasing power, education, and 
health, the HDI provides a more comprehensive measure of 
development than does GNP alone. 

import-substitution industrialization — An economic development 
strategy and a form of protectionism that emphasizes the growth 
of domestic industries by restricting the importation of specif- 
ic manufactured goods, often by using tariff and nontariff mea- 
sures, such as import quotas. Theoretically, capital thus would 
be generated through savings of foreign-exchange earnings. 
Proponents favor the export of industrial goods over primary 
products and foreign-exchange considerations. In the post- 
World War II period, import- substitution industrialization was 



423 



Chile: A Country Study 

most prevalent in Latin America. Its chief ideological propo- 
nents were the Argentine economist Raul Prebisch and the Eco- 
nomic Commission for Latin America (q.v.). The main 
weaknesses in Latin America are as follows: the domestic mar- 
kets in the region are generally too small; goods manufactured 
domestically are too costly and noncompetitive in the world 
market; most states in the region have an insufficient variety 
of resources to build a domestic industry; and most are also 
too dependent on foreign technology. 

Inter- American Treaty of Reciprocal Assistance of 1947 (Rio 
Treaty) — A regional alliance, signed in Rio de Janeiro in 1947, 
that established a mutual security system to safeguard the 
Western Hemisphere from aggression from within or outside 
the zone. Signatories include the United States and twenty Latin 
American republics. In 1975 a special conference approved, 
over United States objections, a Protocol of Amendment to the 
Rio Treaty that, once ratified, would establish the principle 
of "ideological pluralism" and would simplify the rescinding 
of sanctions imposed on an aggressor party. 

International Monetary Fund (IMF) — Established on December 
27, 1945, the IMF began operating on March 1, 1947. The 
IMF is a specialized agency affiliated with the United Nations 
that takes responsibility for stabilizing international exchange 
rates and payments. The IMF's main business is the provi- 
sion of loans to its members when they experience balance of 
payments difficulties. These loans often carry conditions that 
require substantial internal economic adjustments by the 
recipients. The IMF's capital resources comprise Special Draw- 
ing Rights and currencies that the members pay under quotas 
calculated for them when they join. These resources are sup- 
plemented by borrowing. In 1993 the IMF had 175 members. 

International Telecommunications Satellite Organization (Intel- 
sat) — Created in 1964 under a multilateral agreement, Intel- 
sat is a nonprofit cooperative of 1 16 countries that jointly own 
and operate a global communications satellite system. 

Kennedy Amendment — After evidence of severe repression by the 
military regime following the overthrow of President Salvador 
Allende Gossens in September 1973, the United States Con- 
gress in 1974 adopted the Kennedy Amendment, prohibiting 
all security assistance and sales to Chile. This restriction was 
made much more general in the International Security Assistance 
and Arms Export Control Act of 1976, prohibiting transfers to 
any country "which engages in a consistent pattern of gross 
violations of internationally recognized human rights." 



424 



Glossary 



latifundio — A large landed estate held as private property, which 
may be farmed as a plantation, by tenant sharecroppers, or as 
a traditional hacienda. The latifundio system (latifundismo) is a 
pattern of landownership based on latifundios owned by local 
gentry, absentee landlords, and domestic or foreign corporations. 

Latin American Free Trade Association (LAFTA) — A regional 
group founded by the Montevideo Treaty of 1960 to increase 
trade and foster development. LAFTA 's failure to make 
meaningful progress in liberalizing trade among its members 
or to move toward more extensive integration prompted the 
leaders of five Andean states to meet in Bogota in 1966. This 
meeting led to the creation in 1969 of the Andean Group 
(q. v.) — consisting of Bolivia, Chile, Colombia, Ecuador, and 
Peru (Venezuela joined in 1973) — to serve as a subregional 
structure within LAFTA. LAFTA was replaced in 1980 by the 
Latin American Integration Association (Asociacion Latino- 
americana de Integration — ALADI), which advocated a region- 
al tariff preference for goods originating in member states. 
ALADI has since declined as a major Latin American integra- 
tion effort in favor of regional efforts, such as the Southern Cone 
Common Market (q.v.). 

League of Nations — An international organization whose covenant 
arose out of the Paris Peace Conference in 1919. It was created 
for the purpose of preserving international peace and security 
and promoting disarmament by obligating nations to submit 
their conflicts to arbitration, judicial settlement, or to the League 
Council for consideration. The League of Nations contravened 
traditional principles of neutrality and the right to employ force 
to resolve disputes. By not signing the Treaty of Versailles, 
the United States refused to join, but the organization had fifty- 
three members by 1923. Although the League of Nations con- 
sidered sixty-six disputes and conflicts between 1920 and 1939, 
it proved ineffective against German, Italian, Japanese, and 
Soviet aggression in the 1930s. Formally disbanded in April 
1946, its functions were transferred to the United Nations. 

liberation theology — An activist movement led by Roman Catholic 
clergy who trace their inspiration to the Second Vatican Council 
(1962-65), when some church procedures were liberalized, and 
the second meeting of the Latin American Bishops' Confer- 
ence (Conferencia Episcopal Latinoamericana — CELAM) in 
Medellin (1968), which endorsed greater direct efforts to im- 
prove the lot of the poor. Advocates of liberation theology — 
sometimes referred to as "liberationists" — work mainly through 
Christian Base Communities (q.v.). 



425 



Chile: A Country Study 

marginality — A concept used to explain the poor political, economic, 
and social conditions of individuals within a society, social classes 
within a nation, or nations within the larger world community. 
Refers often to poverty-stricken groups left behind in the modern- 
ization process. They are not integrated into the socioeconomic 
system, and their relative poverty increases. Marginality is some- 
times referred to as dualism or the dual society thesis. 

mayorazgo — Colonial system whereby the elder son inherited the titles 
and properties of the family. 

Mercosur — See Southern Cone Common Market. 

mestizo — Originally, term designated the offspring of a Spaniard 
and a native American. It now means any obviously nonwhite 
individual who is fluent in Spanish and observes Hispanic cul- 
tural norms. 

monetarism — An economic policy based on the control of a coun- 
try's money supply. Monetarists assume that the quantity of 
money in an economy determines its economic activity, par- 
ticularly its rate of inflation. A rapid increase in the money 
supply creates rising prices, resulting in inflation. To curb in- 
flationary pressures, governments need to reduce the supply 
of money and raise interest rates. Monetarists believe that con- 
servative monetary policies, by controlling inflation, will in- 
crease export earnings and encourage foreign and domestic 
investments. Monetarists have generally sought support for their 
policies from the International Monetary Fund (q. v.), the World 
Bank (q.v.), and private enterprise, especially multinational cor- 
porations. The University of Chicago economist Milton Fried- 
man is considered to be a leading monetarist. 

North American Free Trade Agreement (NAFTA) — A free-trade 
agreement comprising Canada, Mexico, and the United States. 
Tripartite negotiations to form NAFTA began among these 
countries in June 1991 and were concluded in August 1992. 
The United States Congress finally ratified NAFTA in Novem- 
ber 1993, and the agreement went into effect on January 1, 
1994. NAFTA was expected to create a free-trade area with 
a combined population of 356 million and a GDP (q.v.) of more 
than US$6 trillion. Chile was expected to be incorporated into 
NAFTA on January 1, 1995. 

Organisation for Economic Co-operation and Development 
(OECD) — A Paris-based organization of twenty-four European 
countries, Australia, Canada, and the United States that pro- 
motes economic and social welfare throughout the OECD area 
by assisting its member governments in the formulation of poli- 
cies designed to this end and by coordinating these policies. 



426 



Glossary 



It also helps coordinate its members' efforts in favor of develop- 
ing countries. 

Organization of American States (OAS) — Established by the Ninth 
International Conference of American States held in Bogota 
on April 30, 1948, and effective since December 13, 1951, the 
OAS has served as a major regional organization composed 
of thirty-five members, including most Latin American states 
and the United States and Canada. Determines common po- 
litical, defense, economic, and social policies and provides for 
coordination of various inter- American agencies. Responsible 
for implementing the Inter- American Treaty of Reciprocal As- 
sistance (Rio Treaty — q. v. ) when any threat to the security of 
the region arises. 

patronato real — The "king's patronage" was the absolute control 
of clerical patronage in the colonies that the papacy gave to 
the kings of Spain. The Spanish crown maintained this exten- 
sive power over the church throughout the colonial period. It 
ended with independence, when the church lost the protection 
of royal support. 

Peronism — An eclectic Argentine political movement formed in 
1945-46 to support the successful presidential candidacy of Juan 
Domingo Peron. The movement later splintered, with left- 
wingers forming the Montoneros urban guerrilla group. 
Nevertheless, the fractious movement survived Peron 's death 
in 1974 and made a good showing in the congressional elec- 
tions of 1986. The political, economic, and social ideology of 
Peronism was formally labeled "social justice" (Justicialismo) 
in 1949. It combines nationalism, social democracy, loyalty to 
the memory of Peron, and personalism, which is the dominance 
of a nation's political life by an individual, often a charismatic 
personality. 

plebiscite — A device of direct democracy whereby the electorate 
can pronounce, usually for or against, some measure put before 
it by a government. Also known as a referendum. A Chilean 
president may convoke a plebiscite, under Article 117 of the 
constitution, if the president totally rejects an amendment ap- 
proved by Congress. Articles 118 and 119 further specify the 
conditions under which a plebiscite may be held. 

"popular" sectors — A term similar to popular culture, referring 
to the masses of working-class, underemployed, and unem- 
ployed citizens. 

positivism — The theory that genuine knowledge is acquired by 
science and that metaphysical speculation has no validity. Positi- 
vism, based largely on the ideas of the French philosopher 



427 



Chile: A Country Study 

Auguste Comte, was adopted by many Latin American intellec- 
tuals in the late nineteenth and early twentieth centuries. 
Chilean positivists promoted secular education, free inquiry, 
the scientific method, and social reform. 

real exchange rate — The value of foreign exchange corrected for 
differences between external and domestic inflation. 

reformed sector — Under an unprecedented^ strong agrarian re- 
form law proposed by the administration of Eduardo Frei Mon- 
talva (1964-70) in late 1965 and adopted in July 1967, the 
reformed sector, consisting of cooperatives, was created. 

Richter scale — A logarithmic scale, invented in 1935 by United 
States geophysicist Charles Richter, for representing the energy 
released by an earthquake. A figure of 2 or less indicates the 
earthquake is barely perceptible; a figure of 5 or more indi- 
cates the earthquake may be destructive, and a figure of 8 or 
more indicates the earthquake is a major earthquake. 

Rio Group — A permanent mechanism for consultation and politi- 
cal coordination that succeeded the Contadora Support Group. 
Founded in December 1986, the Contadora Support Group 
consisted of Argentina, Brazil, Colombia, Mexico, Panama, 
Peru, Uruguay, and Venezuela. Its second meeting, attended 
by the presidents of the seven member countries (Panama's 
membership was temporarily suspended in February 1988), was 
held in Punta del Este, Uruguay, in October 1988. In 1990 
Chile joined the Rio Group. In 1993 the Rio Group had twelve 
members: Argentina, Bolivia, Brazil, Chile, Colombia, Ec- 
uador, Mexico, Panama, Paraguay, Peru, Uruguay, and Vene- 
zuela. The seventh summit of the Rio Group was held in San- 
tiago, Chile, on October 15-16, 1993. 

Rio Treaty — See Inter- American Treaty of Reciprocal Assistance. 

Southern Cone Common Market (Mercado Comun del Cono 
Sur — Mercosur) — An organization established on March 26, 
1991, by Argentina, Brazil, Paraguay, and Uruguay for the 
purpose of promoting regional economic cooperation. Chile was 
conspicuously absent because of its insistence that the other four 
countries first had to lower their tariffs to the Chilean level be- 
fore Chile could join. Mercosur aimed to form a common mar- 
ket by December 31, 1994. 

state of exception — States of assembly, siege, emergency, and catas- 
trophe that may be declared under Article 40 of the constitu- 
tion by the president of the republic, with the consent of the 
National Security Council, cover the following exceptional sit- 
uations, respectively: a foreign war, an internal war or internal 



428 



Glossary 



commotion, an internal disturbance, and an emergency or pub- 
lic calamity. 

structuralism — An economic policy that blames chronic inflation 
primarily on foreign trade dependency, insufficient local 
production (especially in agriculture), and political struggles 
among entrenched vested interests over government contracts. 
Structuralists advocate encouraging economic development and 
modernization through Keynesian and neo-Keynesian policies 
of governmental stimulative actions, accompanied by organiza- 
tional reforms. Structuralists contend that the policies of mone- 
tarism (q.v.) retard growth and support the status quo. 

terms of trade — The ratio between prices of exports and prices of 
imports. In international economics, the concept of "terms of 
trade" plays an important role in evaluating exchange rela- 
tionships between nations. The terms of trade shift whenever 
a country's exports will buy more or fewer imports. An im- 
provement in the terms of trade occurs when export prices rise 
relative to import prices. The terms of trade turn unfavorable 
in the event of a slump in export prices relative to import prices. 

Third International — Created in 1921 by the Russian Bolsheviks, 
its founding involved the emergence of separate communist par- 
ties sharply opposed to socialist or social democratic parties. 
These new communist parties were organized along Marxist- 
Leninist lines. 

value-added tax (VAT) — An incremental tax applied to the value 
added at each stage of the processing of a raw material or the 
production and distribution of a commodity. It is calculated 
as the difference between the product value at a given state and 
the cost of all materials and services purchased as inputs. The 
value-added tax is a form of indirect taxation, and its impact 
on the ultimate consumer is the same as that of a sales tax. 

World Bank — The informal name for the International Bank for 
Reconstruction and Development (IBRD). The IBRD was con- 
ceived at the Bretton Woods Conference on July 22, 1944, and 
became effective on December 27, 1945. Its primary purpose 
is to provide technical assistance and loans at market-related 
rates of interest to developing countries at more advanced stages 
of development. The World Bank Group consists of the IBRD, 
the International Development Association (IDA), the Interna- 
tional Finance Corporation (IFC), and the Multilateral Invest- 
ment Guarantee Agency (MIGA). The IDA, a legally separate 
loan fund administered by the staff of the IBRD, was established 
in 1960 to furnish credits to the poorest developing countries 
on much easier terms than those of conventional IBRD loans. 



429 



Chile: A Country Study 

The IFC, founded in 1956, supplements the activities of the 
IBRD through loans and assistance designed specifically to en- 
courage the growth of productive private enterprises in develop- 
ing countries. The MIGA, founded in 1988, insures private 
foreign investment in developing countries against various non- 
commercial risks. The president and certain senior officers of 
the IBRD hold the same positions in the IFC. The affiliated 
international organizations of the World Bank Group are owned 
by the governments of the countries that subscribe their capi- 
tal. To participate in the World Bank Group, member states 
must first belong to the International Monetary Fund (IMF — 
q.v.). In 1993 the World Bank Group included 174 member 
countries. By the early 1990s, the Latin American and Carib- 
bean region had received more loan aid through the World Bank 
Group than any other region. 



430 



Index 



abortion, 129-30, 245, 249, 256-57 

Academia de Guerra. See War Academy 

Academia de Guerra Naval. See Naval 
War Academy 

Academia Politecnica Aerea. See Air Force 
Technical College 

Academia Politecnica Militar. See Military 
Polytechnical Academy 

Accion Chilena Anticomunista. See Chil- 
ean Anti-Communist Action Group 

AChA. See Chilean Anti-Communist Ac- 
tion Group 

Aconcagua, 64 

acquired immune deficiency syndrome 
(AIDS), 106-7 

Adimark, xli, 118, 119, 129 

Administradoras de Fondos de Pensiones. 
See Pension Fund Administrators 

Aeronautic Constructions, S.A. (Con- 
strucciones Aeronauticas, S.A. — 
CASA), 307 

AFL-CIO. See American Federation of 
Labor-Congress of Industrial Organi- 
zations 

AFPs. See Pension Fund Administrators 
Agrarian Labor Party, 41, 42 
agrarian reform. See land reform 
Agrarian Reform Corporation (Corpora- 
cion de Reforma Agraria — Cora), 145 
Agrarian Reform Law (1962), 145 
agricultural products {see also under in- 
dividual crops): demand for, 25; export 
of, 72, 74, 140-41, 191; fruit, 71, 72, 
74, 165-66; grapes, 84, 266; import of, 
165-66; wheat, 141 
agriculture, 163, 165-66; of Araucanians, 
6; changes in, 90; employment in, 91; 
export crops, 20; in far north, 70; in 
near north, 71; as percentage of gross 
domestic product, 161-62; potential 
for, 78; prices, control of, 144; privati- 
zation in, ; productivity of, 162; slash- 
and-burn, 6; unions, 33 
Aguirre Cerda, Pedro, 31, 35 
AIDS. See acquired immune deficiency 
syndrome 

air force, 305-8; aircraft of, 305, 307, 
322-23; civic-action role of, 308; class 



consciousness in, 29, 310; commander 
in chief of, 297; commands of, 305; 
conditions of service in, 310-11; crea- 
tion of, 288; education requirements 
for, 311; foreign influences on, 289, 
290; insignia, 316; materiel, 290, 307, 

309- 10, 316, 322-23; number of per- 
sonnel in, 278, 305; organization of, 
305-8; ranks, 316; recruitment for, 

310- 11; schools, 312; spending on, 
309-10; training of, 264, 307; uni- 
forms, 316 

Air Force Technical College (Academia 

Politecnica Aerea), 312 
airports, 178 

Albania: relations with, 48 
Alessandri Besa, Arturo, xli, 254 
Alessandri Palma, Arturo, 4; as president, 

30-31, 34-36, 123, 200, 217; support 

for, 30 

Alessandri Rodriguez, Jorge, 204, 250, 
257; in election of 1958, 43-44; in elec- 
tion of 1970, 46, 47 

Alessandri Rodriguez administration 
(1958-64), 44-45 

Allende Gossens, Salvador, xxxv, 31; 
career of, 35, 41; in election of 1958, 
43-44; in election of 1964, 44; in 
election of 1970, 46, 47, 145, 199, 202, 
247; suicide of, xxxvi-xxxvii, 51, 149, 
203 

Allende Gossens administration (1970- 
73), xxxv, 47-51; analysis of, xxxvi, 51; 
businesses under, 258; economy under, 
47-48, 139, 145-46; labor under, 259; 
land reform under, 47, 89; nationali- 
zation under, 218; opposition to, 
xxxv-xxxvi, 50, 249, 250, 265; over- 
thrown, xxxvi, 50-51, 139, 149, 203, 
247, 278; public sector under, 219; re- 
lations of, with Catholic Church, 256; 
relations of, with judiciary, 231 

Alliance for Progress, 44 

Almagro, Diego de, xxxv, 7, 279 

Almeyda, Clodomiro, 146 

American Federation of Labor-Congress 
of Industrial Organizations (AFL- 
CIO), 39 



431 



Chile: A Country Study 



amnesty law, xl, 292-93 

Anaconda Copper, 41, 42, 45; national- 
ized, 47, 218 

Andlisis, 262 

anarchism, 30 

anarcho-syndicalism, 30 

Andean Group, 46, 192 

Andes Mountains, xxxv, 64-67, 70, 71, 
74, 277 

Aninat Ureta, Eduardo, 192 

annulment (see also divorce), 129 

Antiterrorist Law (1984), 337 

Antofagasta: fishing in, 70; port of, 178 

Apsi, 262 

Araucanian people, 6-7; agriculture of, 
6; living standards of, 7; mythologized, 
7; population of, 6; on reservations, 25; 
resistance of, to Spanish conquest, 6, 
7-8, 9, 25, 78, 279, 283, 187; as slaves, 
9 

Araucanian uprising of 1553-58, 7-8 
Arauco, 78 

Archi. See Association of Chilean Broad- 
casters 

Argentina (see also Viceroyalty of the Rio 
de la Plata): border with, 25, 64; border 
dispute with, 268, 278, 288, 339; ex- 
ports to, 168; Ibahez exiled to, 33; 
O'Higgins exiled to, 14; oil production 
with, 173; relations with, 278; trade 
with, 11-12, 191 

Arica: port of, 178 

aristocratic republicanism (1830-91), 
16-27 

Armada de Chile. See navy 

Armaments School (Escuela de Ar- 
mamentos), 302 

armed forces: attempted coup by, xxxv, 
50; attitudes toward, 25, 310; as au- 
tonomous branch of government, xl, 
236-38; civic-action role of, 308; class 
consciousness in, 29, 310; commanders 
in chief of, 236-37, 238, 297; command 
structure, 296-99; under constitution 
of 1980, 205-7, 227, 236; control over, 
297; corruption in, 292; development 
of, 287-90; under Gonzalez, 40; head 
of, 296-97; human rights abuses by, 
xxxvii; impact of Great Depression on, 
288-89; influences on, 287, 289; inter- 
nal security by, 295; intervention of, in 
politics, 32-34; missions of, 295-96; 
modernization of, 339; origins of, 



280-82; pay and benefits in, 53; under 
Pinochet, 53; political role of, 3; profes- 
sionalization of, 25; relations of, with 
Frei Ruiz-Tagle, xli-xliii; reserves, 
278, 310; resistance of, to reform, xli- 
xlii; restructuring of, 25; schools, 311; 
size of, 178; subsidies for, 308-9; train- 
ing by, of foreign troops, 277, 311; 
training of, 311-12; uniforms, ranks, 
and insignia of, 312-16; women in, 310 

Armored Cavalry School (Regimiento Es- 
cuela de Caballeria Blindada), 311 

Armored Forces School (Escuela de Fuer- 
zas Blindadas), 311 

army, 9, 299-302; aircraft of, 302; civic- 
action role of, 308; class consciousness 
in, 29, 310; commander in chief of, 
216, 226-27, 237, 278, 295, 297; con- 
ditions of service in, 310-11; divisions 
of, 299-301; German influence on, 277, 
287; insignia, 312-13; materiel, 290, 
302, 320-31; military areas of, 299- 
301; modernization in, 299; number of 
troops in, 264, 278, 284, 288, 299; 
offenses committed by, 237; opposition 
of, to constitutional reform, 294; ranks, 
313; recruitment for, 310-11; restruc- 
turing of, 290-91; troops of, 301-2; 
uniforms, 312 

Army Aviation Command (Comando de 
Aviacion del Ejercito— CAE), 291, 311 

Army Factories and Yards (Fabricas y 
Maestranzas del Ejercito — Famae), 320 

Army of the Andes, 280 

Arriagada, Genaro, 294 

Artillena de Costas. See Coast Artillery 

Artillery School (Regimiento Escuela de 
Artillena), 311 

Arturo Prat Naval School (Escuela Naval 
Arturo Prat), 281, 302, 311 

Asamblea de la Civilidad. See Assembly 
of Civility 

Asenav. See Naval Shipyards and Services 

Asmar. See Naval Docks and Yards 

Asociacion de Bancos e Instituciones 
Financieras. See Association of Banks 
and Financial Institutions 

Asociacion de Radiodifusores de Chile. See 
Association of Chilean Broadcasters 

Asociacion Gremial de Duenos de Cam- 
iones. See Truck Owners Association 

Assembly of Civility (Asamblea de la 
Civilidad), 98 



432 



Index 



Association of Banks and Financial Insti- 
tutions (Asociacion de Bancos e Institu- 
ciones Financieras), 96 

Association of Chilean Broadcasters 
(Asociacion de Radiodifusores de 
Chile— Archi), 179 

associations (see also labor unions), 94-98; 
business, 96, 258, 259; under constitu- 
tion of 1980, 207; formality of, 94; 
number of, 94; occupational, 94-95, 
97; under Pinochet, 98; political role of, 
97, 98; professional, 96 

Astilleros y Maestranzas de la Armada. 
See Naval Docks and Yards 

Astilleros y Servicios Navales. See Naval 
Shipyards and Services 

Atacama Desert, xxxv, 69, 277; oil explo- 
ration in, 173 

audiencia, 7 

Aylwin Azocar, Patricio, xxxviii, 159-60, 
215, 268-71; background of, 222; in 
elections of 1989, 215, 278; as negoti- 
ator for constitutional reforms, 213, 
222; as opposition organizer, 209 

Aylwin Azocar administration, 63, 292; 
antidrug agreements of, 334; and ap- 
pointed senators, 227; armed forces un- 
der, 295; Constitutional Tribunal 
under, 235; economy under, xxxix, 93, 
151, 159-60, 191, 271; education un- 
der, 114, 118; foreign relations un- 
der, 266; health system under, 107; 
housing under, 108; labor reform un- 
der, 161, 260-61; legislature under, 
230; local government under, 239; 
public sector under, 219; relations of, 
with judiciary, 233; social programs un- 
der, xl, 99, 160-61; tax reform under, 
219 

Aymara people, 79; as percentage of 
population, 80 



balance of payments, xxxvi, 145, 152, 
190-91 

Balmaceda Fernandez, Jose Manuel: 
downfall of, 26-27; opposition to, 
26-27; suicide of, 27; support for, 
26-27 

Baltimore, U.S.S., 27 

Banco Central de Chile. See Central Bank 
of Chile 



Banco del Estado de Chile. See State Bank 
of Chile 

banking sector, 173-74; reform of, 
151-53 

banks: bankruptcies of, 150, 153, 173; 
commercial, 173; under Montt, 21; na- 
tionalized, 47; number of, 152, 174; 
privatized, 152, 157-58; superinten- 
dent of, 32 
Baquedano Gonzalez, Manuel, 286 
Barros Luco, Ramon, 27 
Battle of Ayacucho (1824), 281 
Battle of Bum (1839), 283 
Battle of Cancha Rayada (1818), 280 
Battle of Casma (1839), 283 
Battle of Chacabuo (1817), 280 
Battle of Chorrillos (1881), 286 
Battle of Junm (1824), 281 
Battle of Lircay (1830), 16, 17, 19 
Battle of Maipu (1818), 14, 280 
Battle of Mataquito (1557), 7 
Battle of Miraflores (1881), 286 
Battle of Pisagua (1879), 286 
Battle of Pozo Dolores (1879), 286 
Battle of Rancagua (1814), 13, 280 
Battle of Talcahuano (1818), 280 
Battle of Tucapel (1553), 7, 279 
Battle of Yungay (1839), 19, 283 
Beagle Channel, 277 
Beagle Channel Treaty (1985), 268, 278 
Belgium, 320 

Bilbao Barguin, Francisco, 20 

birth control, 81, 103, 130-31 

Bismarck, Otto von, 100 

black market, 49, 149 

Blanco Encalada, Manuel, 281, 282 

Boeninger Kausel, Edgardo, 225 

Bolivar Palacios, Simon, 281 

Bolivia: antidrug agreements with, 334; 
border with, 25, 64, 334; immigrants 
from, 25-26; territorial disputes with, 
23, 268, 277; war with, 23, 284 

Bolivian Army, 284 

Bonaparte, Joseph, 13 

Bonaparte, Napoleon, 13 

border police (Gendarmes de la Frontera), 
326 

border problems, 268 
borders, 64 

Bossay Leyva, Luis: in election of 1958, 
43-44 

Bourbon rule, 11-13; reforms under, 
11-13 



433 



Chile: A Country Study 



Braden company, 31 

Brazil: exports to, 168; oil production 
with, 173; relations with, 278, 317 

Brazilian Aeronautics Company (Era- 
braer), 323 

Britain: immigrants from, 79; influence 
of, 3; influence of, on navy, 264, 289, 
302; investors from, 22, 25, 26; 
materiel from, 289, 309, 316, 317, 320, 
322; military training by, 288, 289; re- 
lations with, 34, 264, 317; trade with, 
22 

British Aerospace, 323 

Bryan Commission, 230 

Buchi Buc, Herman, 156, 215, 251; in 
elections of 1989, 215 

budget deficit: under Allende, 147, 148; 
eliminated, 149; under military junta, 
156, 219; as percentage of gross domes- 
tic product, 148, 149, 217 

budget surplus, 219; as percentage of 
gross domestic product, 219 

Bulnes Prieto, Manuel, 282, 331; intellec- 
tual life under, 20; as president, 19-20 

Bush, George, 266 

business, 257-59; under Allende, 258; un- 
der military junta, 258; role of, in po- 
litics, 257, 258, 259 

Business and Production Confederation 
(Confederation de la Produccion y del 
Comercio — Coproco), 96 



cabildos, 1 

cabinet, 221; duration of, 221; evaluation 
of, 223-25 

Caceres, Carlos, 214 

CAE. See Army Aviation Command 

Caja del Seguro Obrero. See Workers' 
Security Fund 

Camara Central de Comercio. See Cen- 
tral Chamber of Commerce 

Camara Chilena de la Construction. See 
Chilean Construction Board 

Camara de la Produccion y Comercio. See 
Chamber of Production and Commerce 

Canada: investors from, 27 

CAPE. See Politico-Strategic Advisory 
Council 

Cape Horn, 64, 74, 75 

capital account: liberalization of, 152 

Captain Avalos Prado Military Aviation 



School (Escuela de Aeronautica Mili- 
tar "Capitan Avalos Prado" — EAM), 
288, 312 

Captaincy General of Chile, 7 

Cardoen Cornejo, Carlos, 323, 325 

Cardoen Industries (Industrias Cardoen), 
323-25 

Carrera, Juan Jose, 280 

Carrera Verdugo, Jose Miguel, 13; ex- 
ecuted, 14 

Carter, Jimmy, 53, 264 

Carabineros (national police), 52, 209, 
230, 236-37, 238, 326-29, 338; bud- 
get appropriations, 329; civic-action 
functions, 328; created, 33; director 
general of, 297; materiel, 328; number 
of personnel in, 326, 327, 328; opinion 
of, 329; organization of, 326-27, 328; 
recruitment for, 329; training for, 329; 
uniforms, 329; women in, 328; zones 
of, 327, 328 

Carabineros Corps (Cuerpo de Carabi- 
neros), 326 

Carabineros Regiment (Regimiento de 
Carabineros), 326 

Carlos Ibahez Military Air Base, 307 

CASA. See Aeronautic Constructions, 
S.A. 

CASI. See Internal Security Advisory 
Council 

Castro Ruz, Fidel, xxxvii 

Catholic Church, Roman, 118, 255-57; 
and abortion, 130; and birth control, 
130; and Christian Democrats, 256; 
and Conservatives, 4, 17, 97; and 
divorce, 129; number of parishes of, 
120; as official state religion, 14, 18, 
120, 122; opposition to, 4, 124; organi- 
zation of, 120; under Pinochet, 52; 
progressive theology in, 124, 255; 
resistance of, to O'Higgins, 14; role of, 
in economy, 4; role of, in politics, 4, 
8-9, 32, 50, 122, 124-25, 255, 256; role 
of, in social affairs, 4, 52; separation 
of, from state, 32; as source of divisive- 
ness, 16; support of, for Frei Montal- 
va, 44 

Catholics, Roman: percentage of, in 

population, 1 18; popular beliefs of, 128; 

practicing, 119, 257 
Catholic University of Valparaiso (Uni- 

versidad Catolica de Valparaiso), 115; 

television station of, 263 



434 



Index 



Cauce, 262 
Caupolican, 7-8 

CDT. See Workers' Democratic Federa- 
tion 

CEBs. See Christian Base Communities 

censorship, 17; under military junta, 52 

Center for Contemporary Reality Studies 
(Centro de Estudios de la Realidad 
Contemporanea— CERC), 292 

Center for Public Studies (Centro de Es- 
tudios Publicos— CEP), xli 

Center for Public Studies-Adimark polls, 
xli, 118, 119, 129, 248, 332-33 

Central Bank Council, 188-89, 235-36; 
created, 174 

Central Bank of Chile (Banco Central de 
Chile), 188-89, 218, 220, 223, 235-36; 
autonomy of, 188; bailout by, 157-58; 
created, 32; focus of, 189, 235; inter- 
national reserves of, 145; reform of, 
188-89 

Central Chamber of Commerce (Camara 
Central de Comercio), 96 

central Chile (Chile. Central), 71-72; cli- 
mate of, 71; size of, 71; topography of, 
72; urban areas in, 83 

Central Democratica de Trabaj adores. See 
Workers' Democratic Federation 

Central Unica de Trabajadores de Chile. 
See United Labor Federation 

Central Valley (Valle Central), 67, 72; 
political affiliation in, 4; roads in, 177 

Centro de Estudios de la Realidad Con- 
temporanea. See Center for Contem- 
porary Reality Studies 

Centro de Estudios Publicos. See Center 
for Public Studies 

Centro de Reparaciones de la Aviacion 
Naval. See Naval Aviation Repair 
Center 

Centro Nacional de Informacion. See Na- 
tional Information Center 
Centros de Formacion Tecnica. See Tech- 
nical Training Centers 
CEP. See Center for Public Studies 
CEPAL. See United Nations Economic 

Commission for Latin America 
CERC. See Center for Contemporary 

Reality Studies 
Cerro Mac, 74 
Cerro Moreno Air Base, 307 
CFT. See Technical Training Centers 
Chamber of Deputies, 225; commissions 



in, 227; elections for, 242; members of, 
226 

Chamber of Production and Commerce 

(Camara de la Produccion y Comer- 
cio— CPC), 257 
Chantiers de Normandie, 322 
"Chicago boys," xxxvii, 53, 157 
Chilean Air Force (Fuerza Aerea de 

Chile— FACh). See air force 
Chilean Airlines (Linea Aerea del Co- 

bre — Ladeco), 178 
Chilean Antarctic Territory (Territorio 

Chileno Antartico), 271, 297 
Chilean Anti-Communist Action Group 

(Accion Chilena Anticomunista — 

AChA), 338 
Chilean Armed Forces (Fuerzas Armadas 

de Chile). See armed forces 
Chilean Construction Board (Camara 

Chilena de la Construccion), 96 
Chilean Electric Company (Compama 

Chilena de Electricidad — Chilectra), 

170 

Chilean Navy (Armada de Chile). See 
navy 

Chilean people: historical roots of, 75-80; 
homogeneity of, 80; racial characteris- 
tics of, 79 
Chilean Student Federation (Federacion 
de Estudiantes de Chile— FECh), 29 
Chile Austral. See far south region 
Chile Central. See central Chile 
Chilectra. See Chilean Electric Company 
China: materiel from, 320-21, 324; re- 
lations with, 48 
Christian Base Communities (Comuni- 
dades Eclesiasticas de Base — CEBs), 
124, 257 

Christian Democratic Party (Partido 
Democrata Cristiano — PDC), 205, 
241, 247, 248-50, 264, 294; associa- 
tions identified with, 97; and Catholic 
Church, 256; divisions in, 149; in elec- 
tions of 1970, 46, 202; in elections of 
1973, 49-50; founded, 124, 248; oppo- 
sition of, to Allende, xxxv, 50; under 
Pinochet, 52; political orientation of, 
34, 42, 43, 244, 245, 249, 255; social 
class membership in, 5, 45, 259 

Chuquicamata copper mine, 70, 170 

church and state, 17, 120, 255; conflict 
between, 122; separation of, 123, 255 

CIM. See Navy Infantry Corps 



435 



Chile: A Country Study 



CIMI. See Military Industry and En- 
gineering Command 
cities. See urban areas 
civil-military relations, 294-95 
civil service, 218 

Civil War of 1891, 27, 200, 201, 287 
civil wars of 1818-30, 14-15, 20-21, 282 
Clarin, 261 
Claro, Ricardo, 263 
climate: of central Chile, 71-72; of far 
north, 69-70; of far south, 74-75; of 
near north, 70-71; of south, 72-74 
Clinton, William Jefferson, xlii, 266 
CNI. See National Information Center 
CNS. See National Trade Union Coor- 
dinating Board 
CNT. See National Telephone Company 
CNT. See National Workers' Command 
coal, 170 

Coalition of Parties for Democracy (Con- 
certacion de Partidos por la Demo- 
cracia— CPD), xxxviii, 159-60, 215, 
294 

Coast Artillery (Artilleria de Costas), 290 

Coast Guard, 302, 303-5; search and res- 
cue by, 305; vessels of, 303-5, 322 

coastline, 67, 74, 277 

Cochrane, Thomas Alexander (Lord 
Dundonald), 281, 289 

Codelco. See Copper Corporation 

Codelco Law (1992), 164 

Colombia: military training for, 289; oil 
production with, 173; relations with, 
278; trade with, 191 

colonial rule: attempts at, 7; economy un- 
der, 10-11, 141; resistance to, 6, 7-8, 
9, 25, 78 

Comando de Aviacion del Ejercito. See 
Army Aviation Command 

Comando de Industria Militar e Ingenie- 
ria. See Military Industry and Engineer- 
ing Command 

Comando Nacional de Trabajadores. See 
National Workers' Command 

Comando Supremo de las Fuerzas Arma- 
das. See Supreme Command of the 
Armed Forces 

Comintern. See Communist International 

Comision Economica para America La- 
tina. See United Nations Economic 
Commission for Latin America 

Comision Nacional de Energia. See Na- 
tional Energy Commission 



Committee for Free Elections, 254 
Common Municipal Fund, 240 
communications. See telecommunications 
Communist International (Comintern), 
35 

Communist Party of Chile (Partido Com- 
munista de Chile— PCCh), 5, 30, 43, 
241, 264; in elections of 1970, 46; 
founded, 28, 201, 245; under Gon- 
zalez, 39; legalized, 42; opposition of, 
to Alessandri, 35; opposition of, to 
Roman Catholic Church, 4; under 
Pinochet, 52, 246; political orientation 
of, 34, 35, 42, 43, 245; in Popular 
Unity coalition, 145; social class mem- 
bership in, 5; split in, 39; support for, 
246 

communitarianism, 5, 42 

Compama Chilena de Electricidad. See 
Chilean Electric Company 

Compama de Telefonos de Chile. See 
Telephone Company of Chile 

Compama de Telefonos de Coihaique. See 
Telephone Company of Coihaique 

Compama Nacional de Telefonos. See Na- 
tional Telephone Company 

Comunidades Eclesiasticas de Base. See 
Christian Base Communities 

Conaf. See National Forestry Corpora- 
tion 

Concepcion: climate of, 71; founded, 83; 
growth of, 28 

Concertacion de Partidos por la Democra- 
cia. See Coalition of Parties for Democ- 
racy 

Confederacion de Duefios de Camiones 

de Chile. See Confederation of Truck 

Owners of Chile 
Confederacion de la Produccion y del 

Comercio. See Business and Production 

Confederation 
Confederacion del Comercio Detallista de 

Chile. See Federation of Retail Business 

of Chile 

Confederacion de Trabajadores de Chile. 

See Confederation of Chilean Workers 
Confederacion de Trabajadores del 

Cobre. See Confederation of Copper 

Workers 

Confederacion Gremial del Comercio 
Detallista y de la Pequeha Industria de 
Chile. See Trade Union Confedera- 
tion of Business Retailers and Small 



436 



Index 



Industry of Chile 

Confederation Unitaria de Trabajadores. 
See Unitary Confederation of Labor 

Confederation of Chilean Workers (Con- 
federation de Trabajadores de Chile 
(CTCh), 35 

Confederation of Copper Workers (Con- 
federation de Trabajadores del Co- 
bre— CTC), 260 

Confederation of Truck Owners of Chile 
(Confederation de Duenos de Cami- 
ones de Chile), 96 

Congreso National. See National Con- 
gress 

Congress. See National Congress 

Consejo Asesor de Seguridad Interior. See 
Internal Security Advisory Council 

Consejo Asesor Polftico-Estrategico. See 
Politico-Strategic Advisory Council 

Consejo de Estado. See Council of State 

Consejo de la Pequena y Mediana Indus- 
tria. See Council of Small and Medium 
Enterprises 

Consejo de Production, Transporte y 
Comercio. See Council of Production, 
Transport, and Commerce 

Consejo de Seguridad National. See Na- 
tional Security Council 

Consejo National de Television. See Na- 
tional Council of Television 

Conservative era (1830-61), 17-22 

Conservative Falange (Falange Conser- 
vativa), 248 

Conservative Party (Partido Conser- 
vador), 4-5, 124, 241, 248, 250; asso- 
ciations identified with, 97; class 
membership in, 5; defense of Roman 
Catholic Church, 4, 17, 122, 255; 
formed, 22; geographical distribution 
of, 4; opposition of, to Balmaceda, 26; 
political orientation of, 34, 43; social 
class membership in, 5 

constitutional reforms of 1989, 211-16, 
296; for local governments, 223, 239; 
negotiations for, 212-14, 222; opposi- 
tion to, 214, 294-95 

Constitutional Tribunal (Tribunal Con- 
stitutional), 220, 227, 230, 234-35, 
296; under Aylwin, 235; members of, 
234; powers of, 234-35 

constitution of 1828, 16 

constitution of 1833, 17-18, 200; judiciary 
under, 18; legislature under, 18; presi- 



dent under, 18, 200; religion under, 18, 
120, 122 

constitution of 1925, 31, 32-33, 200, 201; 
church under, 32, 255; citizens' rights 
under, 32; comptroller general under, 
32; economy under, 32; judiciary un- 
der, 231; legislature under, 32, 225-26; 
president under, 32; promulgated, 34; 
workers under, 32-33 

constitution of 1980, 54-55, 204, 205-8; 
amendments to, xli-xlii, 207-8, 227, 
228; armed forces under, 205-7, 236, 
295-96; associations under, 207; Cen- 
tral Bank under, 235; designated sena- 
tors under, 207; labor unions under, 
207; local government under, 207, 223; 
National Security Council under, 206; 
political parties under, 207; president 
under, 205, 221; promulgated, 54-55, 
204-5, 278; reforms to, 214 

Construcciones Aeronauticas, S.A. See 
Aeronautic Constructions, S.A. 

construction, 180-82; employment in, 91, 
183; of housing, 107, 108, 182; as per- 
centage of gross domestic product, 162, 
180; private-sector, 180-82 

consumption: under Allende, 145, 147- 
48; distribution of, 93; under Pinochet, 
152 

Coordinador National de Sindicatos. See 
National Trade Union Coordinating 
Board 

copper, 25; export of, 3, 21, 33, 54, 
141-42, 143, 163; prices, 165; produc- 
tion, 141, 164-65; as source of foreign 
exchange, 143 

Copper Corporation (Corporation del 
Cobre — Codelco), xlii, 165; military 
subsidies from, 308-9 

Copper Law (1954), 308 

copper mines, 170; Chilean control over, 
44, 219; nationalized, 147, 218; work- 
ers' demands in, 29-30 

copper mining, 78, 162, 260 

Copper Stabilization Fund, 165 

Coproco. See Business and Production 
Confederation 

Coquimbo: port of, 178; tourism in, 180 

Cora. See Agrarian Reform Corporation 

Cordillera de Nahuelbuta, 72 

Corfo. See Production Development Cor- 
poration 

Corporation de Fomento de la Production. 



437 



Chile: A Country Study 



See Production Development Corpo- 
ration 

Corporacion de la Vivienda. See Housing 
Corporation 107 

Corporacion del Cobre. See Copper Cor- 
poration 

Corporacion de Reforma Agraria. See 
Agrarian Reform Corporation 

Corporacion Nacional Forestal. See Na- 
tional Forestry Corporation 

Corps of Army Generals, 292 

Correa, Enrique Rios, 225 

Correa, German, 254 

corporatism, xxxvii, 5, 52, 239 

corruption, 218; in government, 8, 310; 
in Parliamentary Republic, 28, 201 

Corvi. See Housing Corporation 107 

Cosena. See National Security Council 

Cosmos, 322 

Council of Commanders in Chief (Junta 

de Comandantes en Jefe), 299 
Council of Small and Medium Enterprises 

(Consejo de la Pequefia y Mediana 

Industria— CPMI), 257 
Council of State (Consejo de Estado), 204 
Council of Production, Transport, and 

Commerce (Consejo de Produccion, 

Transporte y Comercio), 96 
coup d'etat of 1973, xxxvi, 50-51, 139, 

149, 247, 278; justification for, 51, 203 
coups d'etat, attempted: of 1924, 31, 200; 

of 1925, 31; of 1939, 36; of 1973, 

50 

courts, 231-33; appellate, 232-33; claims, 
232; local, 232; members of, 232-33; 
special, 232 

CPC. See Chamber of Production and 
Commerce 

CPD. See Coalition of Parties for Demo- 
cracy 

CPMI. See Council of Small and Medi- 
um Enterprises 

CRAN. See Naval Aviation Repair Center 

crime: categories of, 335; drug-related, 
334; incidence of, 331-33 

Criminal Code, 334-35 

criminal justice system (see also courts; 
judiciary), 334-35; basis for, 334 

criollos: ethnic conflicts of, 8; struggle for 
power by, 14 

Croatia: materiel sold to, 237, 320 

CSFA. See Supreme Command of the 
Armed Forces 



CTC. See Confederation of Copper 
Workers 

CTC. See Telephone Company of Chile 
CTCh. See Confederation of Chilean 

Workers 
Cuba: relations with, 48 
Cuban Revolution (1959), 44, 241 
Cuerpo de Carabineros. See Carabineros 

Corps 

Cuerpo de Infanteria de la Marina. See 

Navy Infantry Corps 
culture, 61; inequities in, 63; influences 

on, 61 

currency: depreciation of, 31; devaluation 

of, 92, 148; overvaluation of, 144, 151 
current account, 190-91; deficit, 191 
customs duties, 21-22, 140; under Ayl- 

win, xxxix, 160, 191; under military 

junta, 150-51 
CUT. See Unitary Confederation of Labor 
CUTCh. See United Federation of 

Chilean Workers 
Czechoslovakia: relations with, 39 



debt crisis, 54, 55, 150, 156-58, 173; 
causes of, 152 

debt servicing, xxxix 

Decree Law 2,200, 154 

Decree Law 2,756, 154 

Decree Law 2,758, 154-55 

Decree Law 3,500, 187 

defense industry, domestic, 265, 319-25 

defense spending, 308-10 

Defense Systems (Sistemas Defensas — 
Sisdef), 322 

Democracia y Progreso. See Democracy 
and Progress 

democracy: under Alessandri, 34; under 
Aylwin, 99; breakdown of, 203; de- 
velopment of, 200-203; transition to, 
158-61, 200, 211-15, 216 

Democracy and Progress (Democracia y 
Progreso), 215 

democratization: of Latin America, 56 

Democratic Party (Partido Democratico), 
28; formed, 22; opposition of, to Ro- 
man Catholic Church, 4; social class 
membership in, 5, 28, 29; support of, 
for Alessandri, 30; support of, for 
Balmaceda, 26 



438 



Index 



demonstrations. See political demonstra- 
tions 

DIDN. See Directorate of National De- 
fense Intelligence 

DINA. See National Intelligence Direc- 
torate 

Dipolcar. See Directorate of Carabineros 
Political Intelligence 

Direccion de Inteligencia Politica de Cara- 
bineros. See Directorate of Carabineros 
Political Intelligence 

Direccion de Inteligencia de la Defensa 
Nacional. See Directorate of National 
Defense Intelligence 

Direccion de Seguridad Publica e Infor- 
maciones. See Directorate of Public 
Security and Information 

Direccion General del Territorio Marti- 
mo y de la Marina Mercante. See 
General Directorate of the Maritime 
Territory and Merchant Marine 

Direccion General de Policfa. See Gener- 
al Directorate of Police 

Direccion Nacional de Inteligencia. See 
National Intelligence Directorate 

Directorate of Carabineros Political Intel- 
ligence (Direccion de Inteligencia Poli- 
tica de Carabineros — Dipolcar), 331 

Directorate of National Defense Intelli- 
gence (Direccion de Inteligencia de la 
Defensa Nacional— DIDN), 330 

Directorate of Public Security and Infor- 
mation (Direccion de Seguridad Pu- 
blica e Informaciones), 331 

divorce {see also annulment), 128-29, 245, 
248, 249, 256-57 

Dragones de Chile. See Dragons of Chile 

Dragons of Chile (Dragones de Chile), 
326 

Drake, Francis, 9 
drug trafficking, 334 
Duhalde Vasquez, Alfredo, 38 



EAM. See Captain Avalos Prado Military 

Aviation School 
earthquakes, 64, 83, 142 
Easter Island (Isla de Pascua), 67, 179, 

287; population of, 67 
ECLA. See United Nations Economic 

Commission for Latin America 
ECLAC. See United Nations Economic 



Commission for Latin America and the 

Caribbean 
economic crisis of 1982-83, 92, 146-49, 

150, 155; causes of, 152 
economic depression of 1870s, 22 
economic reform, 149-58, 162, 199; con- 
solidation of, 150; inequalities caused 

by, xxxix; obstacles to, 152 
economics: free-market, 53; monetarist, 

42; protectionist, 143; structuralist, 42, 

146 

economic stabilization program of 1972, 

148- 49 

economy: areas of concern in, 192-93; un- 
der Alessandri, 34, 44; under Allende, 
47, 49, 139; under Aylwin, 139, 151, 
191; collapse of, in 1982, 55; under 
colonial rule, 10-11; development, 61; 
free-market, 139, 223; under Gonzalez, 
40; government role in, 6, 10; growth 
of, 223; inequities in, 63; informal, 54, 
88, 148, 149; under Pinochet, 139, 

149- 58; policy, 63; recovery of, 209; 
role of government in, 6 

Ecuador: materiel sold to, 320; military 
training for, 289; relations with, 278 

education {see also schools): access to, 44, 
45, 98-99; commitment to, 62; curric- 
ulum, 112; enrollments in, 108-12; 
government responsibility for, 239; 
government spending on, xl, 25, 98-99, 
113-14, 118, 141, 182; higher, 114-18; 
privatized, 63; reforms in, 115-16; in 
rural areas, 80 

Edward VII, 288 

Edwards family, 262 

El Belloto Naval Air Base, 290 

election, plebiscite, of 1988, xxxv, xxxviii, 
55, 98, 199, 204, 211, 278; campaign 
for, 210-11 

election, presidential: of 1920, 31, 220; 
of 1927, 33, 220; of 1932, 34, 220; of 
1938, 35, 220; of 1942, 37, 220; of 
1946, 38, 220; of 1952, 41, 220; of 
1958, 43-44, 220; of 1964, 44, 220; of 
1970, 46-47, 145, 202, 220; of 1989, 
xxxviii-xxxix, 55, 215-16, 220, 242, 
278; of 1993, 252-55 

election reform, 42, 45-46 

elections: coalitions in, 220; congression- 
al, of 1973, 49-50, 148; congression- 
al, of 1989, 242; under constitution of 
1925, 32; under constitution of 1980, 



439 



Chile: A Country Study 



221; local, of 1992, 240-41; manipu- 
lation of, 17, 33, 201, 294 

Electoral Certification Tribunal (Tribunal 
de Certificacion Electoral— TCE), 236 

electoral system, 242-45; abuses of, 236; 
binomial, xlii, 243-44; boundaries for, 
243 

electric power, 170; generation, 170; na- 
tionalized, 142; stations, 170 

elite class, 4; criticism of, 30; economic 
power of, 40; political affiliations in, 5, 
43; political power of, 8, 16; support 
of, for Alessandri, 30 

Elizabeth II, 268 

El Mercurio, 261, 262 

El Mercurio Company, 262 

El Salvador: military training for, 289 

ElSiglo, 261 

El Tepual Military Air Base, 307 
Embraef . See Brazilian Aeronautics Com- 
pany 

EMDN. See National Defense Staff 

employment, 182-83; under Aylwin, 183; 
distribution of, 91; in public sector, 
217; rate of, 90-91, 183; of women, 90 

Employment Program for Heads of 
Household (Programa de Ocupacion 
para Jefes de Hogar— POJH), 156 

employment programs, public, 155-56 

Employment Security Law, 154 

Empresa de Ferrocarriles del Estado. See 
State Railroad Company 

Empresa Nacional de Aeronautica. See 
National Aeronautical Enterprise 

Empresa Nacional de Electricidad. See 
National Electric Company 

Empresa Nacional de Petroleo. See Na- 
tional Petroleum Enterprise 

Empresa Nacional de Telecomunica- 
ciones. See National Telecommunica- 
tions Enterprise 

Enaer. See National Aeronautical En- 
terprise 

ENAP. See National Petroleum Enterprise 
encomenderos, 11, 141 
encomienda system, 11; outlawed, 11 
ENDESA. See National Electric Company 
energy (see also electric power), 170-73; 

privatized, 170 
Engineers' School (Regimiento Escuela de 

Ingenieros), 311 
Enlightenment, 12-13 
Ennquez, Miguel, 337 



Entel. See National Telecommunications 

Enterprise 
environmental pollution, 86, 193 

Ercilla, 262 

Errazuriz Talavera, Francisco Javier, 
215; in elections of 1989, 215 

Errazuriz Zahartu, Federico, 22, 251 

Escuela de Abastecimientos y Servicios. 
See Supplies and Services School 

Escuela de Aeronautica Militar "Capitan 
Avalos Prado." See Captain Avalos 
Prado Military Aviation School 

Escuela de Armamentos. See Armaments 
School 

Escuela de Educacion Fisica. See Physi- 
cal Education School 

Escuela de Especialidades. See Specialists' 
School 

Escuela de Fuerzas Blindadas. See Ar- 
mored Forces School 

Escuela de Infanteria de Marina. See Ma- 
rine Corps School 

Escuela de Ingenieria Naval. See School 
of Naval Engineering 

Escuela de Navigacion Antartica "Pilo- 
to Luis Pardo Villalon. " See Pilot Luis 
Pardo Villalon Antarctic Navigation 
School 

Escuela de Operaciones. See School of 
Operations 

Escuela de Suboficiales y Clases. See Non- 
commissioned Officers' School 

Escuela Militar Femenina. ^Women's 
Military School 

Escuela Militar "General Bernardo 
O'Higgins." See General Bernardo 
O'Higgins Military Academy 

Escuela Naval. See Naval School 

Escuela Naval Arturo Prat. See Arturo 
Prat Naval School 

Escuela Superior de Guerra. See War 
College 

ESG. See War College 

Estado Mayor de la Defensa Nacional. See 
National Defense Staff 

Estado Mayor General. See General Staff 

ethnic groups: conflict among, 8; diver- 
sification of representation by, 78 

Europe: immigrants from, 21, 25-26, 79; 
relations with, 18, 56; support of, for 
Frei Montalva, 44; trade with, 12 

Europeans: relations of, with native 
Americans, 9-10 



440 



Index 



European Space Agency, 179 
Evangelical Pentecostal Church, 123 
exchange rate, 150-51, 157; adjustments 
to, 190; appreciation of, 190; impor- 
tance of, 146; overvaluation of, 150, 
157 

exchange-rate policy, 156, 189, 190-91; 
liberalization of, 140 

executive branch (see also president): or- 
ganization of, 223-24 

exports (see also under individual products), 
33, 191-92; of agricultural products, 
72, 140-41, 191; to Argentina, 168; of 
books and magazines, 168; to Brazil, 
168; of copper, 3, 21, 33, 38, 54, 143, 
163; dependence on, 28; diversification 
of, 151; of fish products, 140; of for- 
estry products, 140, 191; to Germany, 
168; impact of Great Depression on, 
142; to Japan, 168, 192; of manufac- 
tures, 191; of materiel, 319, 320; of 
metals, 21; of minerals, 21, 23-25, 191; 
under Montt, 21; of nitrates, 3, 22-25, 
141-42, 201; nontraditional, 54, 157, 
158; to Peru, 10; reliance on, 3; to 
United States, 38, 163, 168; of wine, 
163 



Fabmil. See Military Manufacturers 

Fabricaciones Militares. See Military 
Manufacturers 

Fabrica Nacional de Aeronaves. See Na- 
tional Aircraft Factory 

Fabricas y Maestranzas del Ejercito. See 
Army Factories and Yards 

FACh. See air force 

Fairey Brook Marine, 322 

Falange Conservativa. See Conservative 
Falange 

Falange Nacional. See National Falange 

Falcons. See Los Halcones 

Famae. See Army Factories and Yards 

families, 131-33; extended, 131 

FAO. See United Nations Food and Agri- 
culture Organization 

far north region (Norte Grande), 69-70; 
agriculture in, 70; climate of, 69-70; 
mining in, 70; topography of, 69-70 

far south region (Chile Austral), 74-75; 
climate of, 74-75; size of, 74; topogra- 
phy of, 75 



Fast Air, 178 

Fatherland and Liberty (Patria y Liber- 
tad), 48, 49 

FECh. See Chilean Student Federation 

Federacion de Estudiantes de Chile. See 
Chilean Student Federation 

Federacion Obrera de Chile. See Workers' 
Federation of Chile 

Federation of Retail Business of Chile 
(Confederation del Comercio Detallista 
de Chile), 257-58 

Federico Santa Maria Technical Univer- 
sity (Universidad Tecnica Federico 
Santa Maria), 115 

Feminine Civic Party (Partido Civico 
Femenino), 243 

Feranti International, 322 

Ferdinand VII, 13 

Feria Internacional del Aire. See Interna- 
tional Air Fair 

Feria Internacional del Aire y del Espa- 
cio. See International Air and Space 
Fair 

Ferrimar Limitada, 325 
FID A. See International Air Fair 
FIDAE. See International Air and Space 
Fair 

financial sector, 173-74; liberalization of, 
152; under military junta, 151-53, 
156-58; nationalized, 156; savings rate, 
xl, 152; subsidies in, 156 
fishing, 166-67; catch, 166-67; employ- 
ment in, 91 ; exports, 140, 165, 166; in 
far north, 70; in southern region, 74 
FNA. See National Aircraft Factory 
FNC. See Nationalist Combat Front 
FNT. See National Labor Front 
FOCh. S« Workers' Federation of Chile 
Fonasa. See National Health Fund 
Fondo Nacional de Salud. See National 

Health Fund 
food: import of, 47; production, 47, 163 
Forces of Order and Public Security. See 

police 
Ford, Gerald R., 53 
foreign assistance, xl; from the United 
States, 38 

foreign debt: under Alessandri, 44; con- 
version plans, 158; under Ibanez, 33; 
payments on, 33 

foreign exchange, xxxvi, 38; abundance 
of, 190; reserves, 149; sources of, 143 

foreign investment, 42 



441 



Chile: A Country Study 



foreign loans, 54 

foreign policy, 44 

foreign relations, 263-71 

forestry, 166, 168-70; employment in, 91; 
exports, 140, 165, 168, 191; as percent- 
age of gross domestic product, 161- 
62 

forests: exploitation of, 168; in far north, 
70; in near north, 71; old-growth, 
168-70; protection of, 328; rain, 71; 
regeneration of, 72, 75, 168 

Fortin Mapocho, 262 

Foxley Riesco, Alejandro, xxxix; candida- 
cy of, 252 

FPMR. See Manuel Rodriguez Patriotic 
Front 

FPMR- A. See Manuel Rodriguez Patri- 
otic Front-Autonomous 

France: immigrants from, 79; materiel 
from, 303, 316, 317, 318; military in- 
fluence of, 287; relations with, 264, 317 

Franco, Francisco, 204 

FRAP. See Popular Action Front 

Freire Serrano, Ramon: exiled, 16; as 
president, 15 

Frei Montalva, Eduardo, xl, 124, 249; in 
election of 1958, 43-44; in election of 
1964, 44; support for, 44, 265 

Frei Montalva administration (1964-70), 
45-47, 89, 202; economy under, xlii, 
145; land reform under, 145; relations 
of, with Catholic Church, 256; trade 
under, xlii 

Frei Ruiz-Tagle, Eduardo, xl-xli, 192, 
248, 295; background of, 254; candida- 
cy of, 252 

Frei Ruiz-Tagle administration, xli-xliii; 
relations of, with armed forces, xli-xliii 

Frente de Accion Popular. See Popular Ac- 
tion Front 

Frente Nacional de Trabajo. See Nation- 
al Labor Front 

Frente Nacionalista de Combate. See Na- 
tionalist Combat Front 

Frente Patriotica Manuel Rodriguez. See 
Manuel Rodriguez Patriotic Front 

Frente Patriotica Manuel Rodriguez- Au- 
tonomo. See Manuel Rodriguez Patri- 
otic Front-Autonomous 

Frente Popular. See Popular Front 

Fresno, Juan Francisco, 208 

Friedman, Milton, xxxvii 

FRPL. See Lautaro Popular Rebel Forces 



Fuerza Aerea de Chile. See air force 
Fuerzas Armadas de Chile. See armed 
forces 

Fuerzas Rebeldes Populares Lautaro. See 
Lautaro Popular Rebel Forces 



Garcia Marquez, Gabriel, xxxvii 
gas, natural, 75, 170; pipeline, 173; re- 
serves, 173 
GDP. See gross domestic product 
Gendarmerfa de Chile. See Judicial Police 
of Chile 

Gendarmes de la Frontera. See border 
police 

General Arbitration Treaty (1902), 288 
General Bernardo O'Higgins Military 
Academy (Escuela Militar "General 
Bernardo O'Higgins"), 282; founded, 
287 

General Directorate of Police (Direccion 
General de Poliria), 327 

General Directorate of the Maritime Ter- 
ritory and Merchant Marine (Direccion 
General del Territorio Maritimo y de 
la Marina Mercante), 303, 312 

General Fishing Law (1991), 167 

General Society of Commerce (Sociedad 
General de Comercio — Sogeco), 325 

General Staff (Estado Mayor General), 
299 

Generation of 1842, 20 

geography, 63-75; natural regions in, 
67-75; size, 68; territorial shape, 63- 
64, 68, 277 

German-Soviet Nonaggression Pact 
(1939), 37 

Germany: immigrants from, 21, 79, 122; 
materiel from, 303, 316, 317; military 
influence of, 277, 287, 289; military 
training by, 288; military training for, 
311; relations with, 34, 38, 264, 317; 
technical assistance, from, 331 

Germany, Federal Republic of (West 
Germany). See Germany 

Gini coefficient, xxxix 

GNP. See gross national product 

gold: export of, 3; mining of, 10, 163 

gold standard, 32, 33 

Golfo de Ancud, 72 

Gonzalez Videla, Gabriel, 31, 221 

Gonzalez Videla administration, 38-41 



442 



Index 



government: armed forces as branch of, 
xl; branches of, 32; encouragement of 
immigration by, 78-79; labor unions 
under, 32-33; military officers in, 51; 
model for, 219-20; proportional rep- 
resentation in, 32; role of, in econ- 
omy, 6, 10, 144; role of, in pension 
funds, 187; separation of church from, 
32 

government, local, 238-41; autonomy of, 
238, 239; under constitution of 1833, 
238; under constitution of 1980, 207, 
223; elections for, 239; form of, 238; 
oversight of, 238; patronage in, 239, 
239; responsibilities of, 240 

government spending: under Allende, 
147; as percentage of gross national 
product, 217 

Gran Carretera Austral. See Southern 
Highway 

Gran Colombia, 281 

Grau, Miguel, 285 

Great Depression, 33, 36, 142, 201; im- 
pact of, on armed forces, 288-89 

gross domestic product (GDP): under Al- 
lende, 147; growth of, xxix, 139, 140, 
144, 151; impact of Great Depression 
on, 142; per capita, 140, 144, 145, 271 

gross domestic product fractions: agricul- 
ture, 161-62; budget deficit, 148, 149, 
217; budget surplus, 219; construction, 
162, 180; forestry, 161-62; livestock 
sector, 161-62; manufacturing, 162; 
mining, 162; nitrates, 141; pension 
funds, 182, 188; social programs, 98, 
99 

gross national product (GNP), 139; 
government spending as a percentage 
of, 217; manufacturing as a percentage 
of, 151 

Grove Vallejo, Marmaduke, 31, 33, 35, 
147, 200 

Guzman Errazuriz, Jaime, 251, 338 



haciendas {see also latifundios), 10-11, 88; 

indentured labor on, 20 
HDI. See human development index 
health: causes of death, 106; under 

Parliamentary Republic, 30; public, 

103, 104-5, 106 
health care: access to, 98, 103; under 



Ri'os, 38 

health care professionals: in National 
Health Service, 104 

health care system, xxxv, 62, 103-7; un- 
der Aylwin, 107; components of, 
104-6; enhancements to, 107; govern- 
ment spending on, xl; private practice 
in, 106; privatized, xxxviii; redesigned, 
104; reform of, 182; services of, 103 

health facilities: military, 103 

Hiriart, Lucia, 98, 210 

housing, 44, 107-8; under Aylwin, 108; 
construction, 107, 108, 180-82, 210; 
shanty towns (pob lactones), 87; of elite, 
86; government responsibility for, xl; 
low-income, 45, 86, 87, 99, 107, 182, 
210; ownership of, 87; under Pinochet, 
107-8; reform, 184; under Rios, 38; 
shortages, 86; subsidies for, 107-8, 184; 
in urban areas, 86-87 

Housing Corporation (Corporacion de la 
Vivienda — Corvi), 107 

Hoy, 262, 312 

Huayna Capac, 279 

human development index (HDI), 99- 
100 

Human Development Report, 1993, 99-100 
Humanist-Green Alliance Party (Partido 

Alianza Humanista- Verde), 248 
human rights, 233; abuses, xxvii, xl, 52, 

199, 223, 256, 264, 267, 278, 291-94, 

330; advocacy for, 8-9, 52, 124-25, 

264, 266; organizations, 52 
Humboldt current, 67 
Hydrographic Institute (Instituto Hidro- 

grafico), 302 



IAI. See Israeli Aircraft Industries 
Ibahez del Campo, Carlos, 31 ; exile of, 33 
Ibariez del Campo administration: first, 

32, 33-34, 201, 308; second, 41-44 
ideologies, 30, 244-45; competition 

among, 40; as source of social cleavage, 

5 

IMF. See International Monetary Fund 
immigrants: acceptance of, 61; accultu- 
ration of, 79; countries of origin of, 21 , 
25-26, 79 
immigration: encouraged, 78-79 
imports, 21, 141; of food, 47; of petro- 
leum, 170 



443 



Chile: A Country Study 



Inca Empire, 6 

income, xl, 90-94; under Allende, 147; 

per capita, 139 
income distribution, 44, 93-94, 183-84; 

under Allende, 145; under Aylwin, 99; 

under Frei Montalva, 45; inequality in, 

183 

independence, 13 

Independent Democratic Union (Union 

Democrata Independiente — UDI), 

215, 251, 254, 294, 295 
Industrial Development Association (So- 

ciedad de Fomento Fabril — Sofofa), 

28-29, 162 
industrialization, 29; import-substitution, 

33, 36, 37, 40, 139, 142-43, 144, 146, 

202, 219, 257 
Industrial Patents Law, 230 
industrial production, 144, 149, 151 
Industrial Workers of the World (I WW), 

30 

Industrias Cardoen. See Cardoen Indus- 
tries 

industry, 162-63; employment in, 183; 
nationalized, 47, 142; percentage of 
population working in, 37; privatized, 
xxxviii, 63; promotion of, 34, 40, 141 

INE. See National Statistics Institute 

infant mortality, xxxix, 30, 54 

Infantry School (Regimiento Escuela de 
Infanteria), 311 

inflation, 144, 219; under Allende, 50, 
145, 146, 147, 148, 149; under Ales- 
sandri, 31, 44, 144; attempts to reduce, 
41-42, 53, 145, 189; under Aylwin, 
139, 271; under Frei Montalva, 144; 
under Gonzalez, 40; under Ibahez, 43, 
144; under Parliamentary Republic, 
28; reduced, 149 

infrastructure, 192-93 

inheritance, 88 

Inostroza, Alfonso, 146 

INP. See Institute of Pension Fund Nor- 
malization 

inquilinos (tenant farmers), 11, 20, 141 

Institute of Instruction and Education, 
326 

Institute of Pension Fund Normalization 

(Instituto de Normalizacion Previ- 

sional— INP), 102 
Institute of Public Health and Preventive 

Medicine (Instituto de Salud y Pre- 

vencion — Isapre), 105-6 



Instituto de Normalizacion Previsional. 
See Institute of Pension Fund Normali- 
zation 

Instituto de Salud y Prevention. See In- 
stitute of Public Health and Preventive 
Medicine 

Instituto Hidrografico. See Hydrograph- 
ic Institute 

Instituto Nacional de Estadfsticas. See Na- 
tional Statistics Institute 

Institutos Profesionales. See Professional 
Institutes 

intellectuals: support of, for Alessandri, 30 

Intelsat. See International Telecommuni- 
cations Satellite Corporation 

Inter- American Treaty of Reciprocal As- 
sistance (1947) (Rio Treaty), 290, 317 

interest rates, 173, 174 

internal security, 331-38; intelligence 
services, 330-31; as mission of armed 
forces, 295 

Internal Security Advisory Council (Con- 
sejo Asesor de Seguridad Interior — 
CASI), 297-99 

International Air and Space Fair (Feria 
Internacional del Aire y del Espacio — 
FIDAE), 319-20 

International Air Fair (Feria Interna- 
cional del Aire— FIDA), 319 

International Criminal Police Organiza- 
tion (Interpol), 330 

International Institute for Strategic 
Studies, 308 

International Monetary Fund (IMF), 
157, 159 

International Telecommunications Satel- 
lite Corporation (Intelsat), 179 
Interpol. See International Criminal Police 

Organization 
Investigations Police, 326, 329-30, 334, 
338; missions of, 329; number of mem- 
bers of, 329; organization of, 329-30 
investment, 271; from United States, 31 
IPs. See Professional Institutes 
Iquique: fishing in, 70; massacre of 

miners in, 30; port of, 178 
Iran: materiel sold to, 320 
Iraq: materiel sold to, 324-25 
Ireland: influence of, on navy, 289 
irrigation: by Araucanians, 6; in far 
north, 70 

Isapre. See Institute of Public Health and 
Preventive Medicine 



444 



Index 



Isla de Chiloe, 72 
Isla de Pascua. See Easter Island 
Isla Robinson Crusoe, 67 
Islas Juan Fernandez, 67 
isolation, xxxv, 9, 61; under Pinochet, 55, 
199, 267 

Israel: materiel from, 318, 320; military 
training for, 311; relations with, 317 
Israeli Aircraft Industries (IAI), 319 
Italy: antidrug agreements with, 334; im- 
migrants from, 79; materiel from, 322; 
relations with, 38; technical assistance, 
from, 331 

IWW. See Industrial Workers of the World 



Japan: exports to, 168, 192; relations 

with, 38; trade with, 267, 268 
Jews, 123 
John Paul II, 125 
judges, 334 

Judicial Police of Chile (Gendarmena de 
Chile), 336 

judiciary: under constitution of 1833, 18; 
corruption in, 231; under military jun- 
ta, 231-32; model for, 231 

Junta de Comandantes en Jefe. See Coun- 
cil of Commanders in Chief 

Junta Nacional de Auxflio Escolar y Be- 
cas. See National Council for School Aid 
and Grants 



Kemmerer, Edwin Walter, 32, 235 

Kennecott Copper, 31, 41, 42, 45; nation- 
alized, 47, 218 

Kennedy Amendment (1974), 317, 319 

Kissinger, Henry, 264 

Klein-Saks Mission, 41, 42 

Korea, Democratic People's Republic of 
(North Korea): relations with, 48 

Korner, Emil, 25, 287 



labor, forced: of mestizos, 11; of native 
Americans, 3; outlawed, 11 

Labor Inspectorate, 154 

labor laws: of 1924, 32, 100; of 1931, 226; 
under Pinochet, 63 

labor market: efficiency of, 182; moder- 
nization of, 182 

labor movement, 259-61; growth of, 28; 



in mining camps, 25; under Popular 
Front government, 36; weakness in, 
261 

Labor Plan (1979), 54, 154, 184, 259-60; 
dismissals under, 184-85; modifications 
to, 260-61 

labor reform, 153-55, 161 

labor unions, 4, 29-30, 94-95, 184-87; 
banned, 52, 98, 153, 161; collective 
bargaining by, 154, 184, 185, 186, 230, 
259; conflicts of, 184-87; under consti- 
tution of 1980, 207; government con- 
trol of, 32-33; membership in, 95, 154, 
186, 260; under military junta, 98, 
259-60; revival of, 54, 184; in rural 
areas, 37, 38, 39, 95; suppression of, 
3, 37 

La Candelaria, 165 

Ladeco. See Chilean Airlines 

La Epoca, 262 

La Escondida copper mines, 170 
LAFTA. See Latin American Free Trade 

Association 
La Fuerza de Submarinos. See Submarine 

Command 
La Fuerza de Transportes. See Transport 

Force 
Lago los Santos, 74 
Lagos Escobar, Ricardo, xli, 247, 248, 

254; candidacy of, 253-54 
lakes, 72, 74 
La Moneda, xxxvi 

LAN-Chile. See National Airline of Chile 
land: conflict over, 3; distribution of, 

89-90; redistribution of, 45, 153 
landowners, 30; political power of, 8, 37, 

38, 39, 40, 42; resistance of, to O'Hig- 

gins, 14 

land reform, 3, 4, 44, 144, 226; under Al- 
lende, 47, 89, 147; church support for, 
124; under Frei Montalva, 45, 89, 202; 
reversal of, xxxix, 53, 89-90, 153 

land use, 90 

La Prensa, 261 

La Reconquista (1814-17), 13 
Larrafn Errazuriz, Manuel, 255 
La Segunda, 261 
La Serena, 180 

Lastarria Santander, Jose Victorino, 20 
Las Ultimas Noticias, 261 
La Tercera de la Hora, 261, 262, 295 
latifundios {see also haciendas), 88-89, 
141; organization of, 88-89 



445 



Chile: A Country Study 



Latin American Free Trade Association 

(LAFTA), 46 
La Tirana, 125 
La Tribuna, 261 
Lautaro, 7, 279 

Lautaro Popular Rebel Forces (Fuerzas 
Rebeldes Populares Lautaro — FRPL), 
337 

Lautaro Youth Movement (Movimiento 
Juvenil Lautaro— MJL), 246, 337, 338 

Law for the Defense of Democracy (1948), 
39 

Law of Political Parties (1987), 242 

Law 19,010, 198 

Law 19,069, 185 

League of Nations, 33, 142 

legislature, 225-31; under Aylwin govern- 
ment, 230; under constitution of 1833, 
18; under constitution of 1925, 32 

Leigh Guzman, Gustavo, 203-4 

Leighton, Bernardo, 330 

Lend-Lease program, 38 

Letelier, Orlando, 53, 230, 265, 266, 317, 
330 

Liberal Alliance, 31; formed, 30 
Liberal era, 22 
liberalism, 5 

Liberal Party (Partido Liberal), 241 , 250; 
formed, 22; opposition of, to Roman 
Catholic Church, 4, 122, 255; political 
orientation of, 34, 43; social class mem- 
bership in, 5; support of, for Balmace- 
da, 26 

Lieutenant Marsh Military Air Base, 308 
life expectancy, xxxix 
Lima: liberated, 281; occupation of, 23, 
282 

Lmea Aerea del Cobre. See Chilean 
Airlines 

Lmea Aerea Nacional de Chile. See Na- 
tional Airline of Chile 
Linz, Juan J., 215 

Lion of Tarapaca. See Alessandri Palma, 
Arturo 

literacy rate, 30, 62; of native Americans, 
80; of peasants, 90 

livestock, 140; cattle, 71, 74, 141; exports, 
165; as percentage of gross domestic 
product, 161-62; sheep, 75 

living standards, xxxix, 45 

Longitudinal Highway. See Pan Ameri- 
can Highway 

Los Cerrillos Air Base, 320 



Los Condores Air Base, 305 

Los Halcones (Falcons), 307 

Los Pincheira gang, 331 

lower class: political affiliations of, 5 

Liiders, Rolf J., 158 

Luksic Group, 263 



Magellan, Ferdinand, 7 
Makina, 325 

Malvinas/Falklands War (1982), 278 
Manuel Rodriguez Patriotic Front 
(Frente Patriotica Manuel Rodriguez- 
FPMR), 209, 246, 337 
Manuel Rodriguez Patriotic Front- 
Autonomous (Frente Patriotica Manuel 
Rodrfguez-Autonomo — FPMR-A), 
337, 338 

manufacturing, 162-63; under Allende, 
147; development of, 162-63; employ- 
ment in, 91; exports, 191; growth of, 
29, 147, 162; nationalized, 142; as per- 
centage of gross national product, 151, 
162; restructuring of, 156 

M APU . See United Popular Action Move- 
ment 

MAPU-L. See United Popular Action 
Movement-Lautaro 

Mapuche language, 80 

Mapuche people, 6, 7, 79, 279; Chris- 
tian missions among, 123; land dis- 
tributed to, 153; military defeat of, 25; 
as percentage of population, 80; rela- 
tions of, with Europeans, 10; on reser- 
vations, 25 

Mapudungu language. See Mapuche lan- 
guage 

Marine Corps School (Escuela de Infan- 

teria de Marina), 302 
Maritain, Jacques, 248 
martial law, 291 
Marxism, 5, 124 

massacres: of miners, 30; of National So- 
cialists, 35 

Massad Adub, Carlos, 193 

materiel, 316; air force, 290, 307, 309-10, 
316, 322-23; army, 290, 302, 320-31; 
from Britain, 289, 309, 316, 317, 320, 
322; of Carabineros, 328; from China, 
320-21, 324; to Croatia, 237, 320; 
development of, 322-23; domestic, 
319-25; exports of, 237, 319, 320, 



446 



Index 



324-25; from France, 303, 316, 317, 
318; from Germany, 303, 316, 317; to 
Iran, 320; to Iraq, 324-25; from Israel, 
318, 320; from Italy, 322; navy, 290, 
303, 309-10, 318, 321-22; to Pakistan, 
320; to Paraguay, 320; produced un- 
der license agreements, 320-21, 322, 
323, 324; production of, 325; from 
Soviet Union, 318; from Spain, 323; 
from Switzerland, 320, 324; from Unit- 
ed States, 290, 303, 317, 323 

Matthei, Evelyn, 252 

Maxivision (TV MAX), 263 

Max-Neef, Manfredo, 254 

mayorazgo inheritance system, 88 

Medellm Conference of Latin American 
Bishops (1968), 124 

media, 80, 261-63; censored, 52, 261; un- 
der military junta, 261-62, 263 

Menem, Carlos Saul, xxxviii, 268-71 

Mensaje, 262 

Mercado Comun del Cono Sur. See 
Southern Cone Common Market 

Merchant Marine, 178, 322 

Mercosur. See Southern Cone Common 
Market 

mestizos, 78; exploitation of, 3; origins 
of, 8; in work force, 20 

Methodist Church, 123 

Mexico: trade with, 191 

middle class, 4; under Allende, 48, 149; 
economic power of, 40; under Gonza- 
lez, 40; growth of, 29; political affilia- 
tions in, 5, 42, 43; political assertiveness 
of, 29; support of, for Alessandri, 30; 
support of, for Frei Montalva, 44 

Middle East: immigrants from, 25-26, 79 

Milicia Republicana. See Republican 
Militia 

Military Academy, 311; uniforms of, 312 

Military Balance, 308 

military conscripts, 310 

Military Industry and Engineering Com- 
mand (Comando de Industria Militar 
e Ingenieria— CIMI), 320 

military junta, 203-5; associations under, 
98; banking reform under, 151-53, 
235; business under, 258; corruption 
in, 310; debt crisis under, 156-58; de- 
structive phase of, 52; economy under, 
63, 149-58; education under, 115-16; 
financial sector under, 151-53; hous- 
ing under, 107-8; human rights abuses 



under, xxvii, xl, 52, 199, 223, 256, 264, 
267, 278, 291-94, 330; judiciary under, 
231-32; labor reform under, 153-55; 
labor unions under, 98, 259-60; land 
reform under, 53, 89-90, 153; local 
government under, 239; media under, 
261-62, 263; members of, 51-52; op- 
position to, 52, 208-9, 210; political 
parties under, 242, 246, 250; privati- 
zation under, 99; public employment 
programs of, 155-56; public sector un- 
der, 219; repression by, 291-94; trade 
policy of, 150-51; unemployment un- 
der, 92-93 

military justice system, 232, 233, 291 

Military Manufacturers (Fabricaciones 
Militares— Fabmil), 322 

military officers, 34; appointment of, 295, 
297; in government, 51; human rights 
abuses by, xl 

Military Polytechnical Academy (Acade- 
mia Politecnica Militar), 311 

military tribunals, 291 

militia, 280, 282 

minerals: export of, 3, 21, 191; produc- 
tion of, 163-64 
miners: massacres of, 30; treatment of, 3 
minifundistas, 1 1 

Minimum Employment Program (Pro- 
grama de Empleo Mfnimo — PEM), 
155-56 

mining {see also under copper; nitrates), 10, 
163-65; in far north, 70; impact of 
Great Depression on, 142; as percent- 
age of gross domestic product, 162, 
163; under Pinochet, 164-65 

Ministry of Defense, 328 

Ministry of Finance, 225 

Ministry of Health, 193 

Ministry of Interior, 225, 240, 326 

Ministry of Labor and Social Welfare, 
154 

Ministry of Planning and Cooperation, 
183 

Ministry of Public Education, 112 
Ministry of Transportation and Telecom- 
munications, 178 
MIR. See Movement of the Revolution- 
ary Left 
missions, Christian, 123 
Mitterrand, Francois, xxxvii 
MJL. See Lautaro Youth Movement 
modernization: under Frei Montalva, 



447 



Chile: A Country Study 



202; under Prieto Vial, 18 
Moffitt, Ronnie, 317 
monetarism, xxxviii 
monetary policy, 188-89 
Montt Torres, Manuel, 20; as president, 

21, 200 
Morris, Raimundo, 281 
mountains, 64-67 

Mountain Warfare School (Regimiento 
Escuela de Montana), 311 

Movement of the Revolutionary Left 
(Movimiento de la Izquierda Revolu- 
cionaria— MIR), 46, 50, 246, 336-37; 
under Allende, 48 

Movimiento de Accion Popular Unitario. 
See United Popular Action Movement 

Movimiento de Accion Popular Unitario- 
Lautaro. See United Popular Action 
Movement-Lautaro 

Movimiento de la Izquierda Revolu- 
cionaria. See Movement of the Revolu- 
tionary Left 

Movimiento de Unidad Nacional. See Na- 
tional Unity Movement 

Movimiento Juvenil Lautaro. See Lautaro 
Youth Movement 

MUN. See National Unity Movement 

Mutuales de Seguridad. See Security As- 
sistance Institutions 



NAFTA. See North American Free Trade 

Agreement 
narcotics trafficking, 333-34; control of, 

333 

National Accord for Transition to Full 

Democracy, 208, 256 
National Aeronautical Enterprise (Em- 

presa Nacional de Aeronautica — 

Enaer), 307, 323 
National Agricultural Association (So- 

ciedad Nacional de Agricultura — 

SNA), 96, 258 
National AIDS Commission, 107 
National Aircraft Factory (Fabrica Na- 
cional de Aeronaves — FNA), 322 
National Airline of Chile (Lmea Aerea 

Nacional de Chile— LAN-Chile), 178 
National Association of Mining (Sociedad 

Nacional de Mineria), 96 
National Commission on Truth and 



Reconciliation (Rettig Commission), 
xxxvii, 237, 292, 330 

National Congress (Congreso Nacional), 
84; closed, 52; under constitution of 
1925, 32, 225-26; opened, 225; rela- 
tions of, with president, 230-31 

National Council for School Aid and 
Grants (Junta Nacional de Auxflio Es- 
colar y Becas), 108-10 

National Council of Television (Consejo 
Nacional de Television), 263 

National Defense Staff (Estado Mayor de 
la Defensa Nacional— EMDN), 299, 
330 

National Education Law, 230 

National Electric Company (Empresa Na- 
cional de Electricidad— ENDESA), 170 

National Energy Commission (Comision 
Nacional de Energia), 223 

National Falange (Falange Nacional), 42, 
248; political orientation of, 34 

National Forestry Corporation (Corpora- 
cion Nacional Forestal — Conaf), 168 

National Health Fund (Fondo Nacional 
de Salud — Fonasa), 105 

National Health Service (Servicio Na- 
cional de Salud — SNS): created, 103; 
physicians in, 104 

national identity, 61-62 

National Information Center (Centro Na- 
cional de Informacion— CNI), 52, 204, 
330 

National Intelligence Directorate (Direc- 
tion Nacional de Inteligencia — DINA), 
52, 204, 291, 330 

Nationalist Combat Front (Frente Na- 
cionalista de Combate— FNC), 338 

nationalization, 47-48, 145, 148, 218; of 
copper mines, 147 

National Labor Front (Frente Nacional 
de Trabajo— FNT), 251 

National Party (Partido Nacional), 250; 
in elections of 1970, 46; in elections of 
1973, 49-50; formed, 22; opposition of, 
to Allende, 50, 250; opposition of, to 
Roman Catholic Church, 4 

National Petroleum Enterprise (Empre- 
sa Nacional de Petroleo— ENAP), 173 

National Renewal (Renovation Na- 
cional), 212-13, 215, 239, 251, 252, 
254, 294, 295 

Nationals, 244 

National Security Council (Consejo de 



448 



Index 



Seguridad Nacional — Cosena), 206, 
220, 296; under constitution of 1980, 
227; members of, 296; role of, 214 
National Security Doctrine, 51 
National Socialist Movement, 35 
National Statistics Institute (Instituto Na- 
cional de Estadi'sticas — INE), 332 
National Statute for Teachers, 114 
National System of Health Services (Sis- 
tema Nacional de Servicios de Salud — 
SNSS), 104-5; public health under, 
104-5 

National Telecommunications Enterprise 
(Empresa Nacional de Telecomuni- 
caciones — Entel), 179 

National Telephone Company (Compa- 
fria Nacional de Telefonos — CNT), 179 

National Telephone Company of Spain 
(Telefonica), 179 

National Television Network of Chile — 
Channel 7 (Television Nacional de 
Chile— Canal 7), 263 

National Tourism Service (Servicio Na- 
cional de Turismo — Sernatur), 180 

National Trade Union Coordinating 
Board (Coordinador Nacional de 
Sindicatos— CNS), 260 

National Unity Movement (Movimien- 
to de Unidad Nacional— MUN), 251 

National Women's Service (Servicio Na- 
cional de la Mujer — Sernam), 223, 230 

National Workers' Command (Coman- 
do Nacional de Trabaj adores — CNT), 
260 

native Americans (see also under individual 
cultures), 8, 79-80; forced labor of, 3; 
as percentage of population, 80; rela- 
tions of, with Europeans, 9-10; social 
definition of, 79 

Naval Aviation Repair Center (Centro de 
Reparaciones de la Aviacion Naval — 
CRAN), 303 

Naval Aviation Service (Servicio de Avia- 
cion Naval), 288, 302, 303 

Naval Docks and Yards (Astilleros y 
Maestranzas de la Armada — Asmar), 
321-22 

Naval School (Escuela Naval), 281 
Naval Shipyards and Services (Astilleros 

y Servicios Navales — Asenav), 322 
Naval War Academy (Academia de Guer- 

ra Naval), 302, 312 
navy, 302-5, 322; civic-action role of, 



308; class consciousness in, 29, 310; 
commander in chief of, 297; conditions 
of service in, 310-11; education re- 
quirements for, 311; expansion of, 288; 
influences on, 264, 289, 302; insignia, 
313; materiel, 290, 303, 309-10, 318, 
321-22; mutiny of (1931), 288; naval 
zones of, 302-3; number of personnel 
in, 278; organization of, 303; origins 
of, 281; recruitment for, 310-11; 
spending on, 309-10; technical as- 
sistance to, 288; training, 311-12; uni- 
forms, 313, 316; vessels of, 281, 284, 
318, 322 

Navy Infantry Corps (Cuerpo de Infan- 
teria de la Marina— CIM), 290, 302, 
303 

Nazca Plate, 64 

near north region (Norte Chico), 70-71; 

climate of, 71; size of, 70; topography 

of, 71 
Neruda, Pablo, 245 
Nevado Ojos del Salado, 64 
newspapers {see also media), 261-62 
Nicaragua: military training for, 289 
nitrate mines, 141, 284; demands of, 

29-30; foreign investment in, 25, 27 
nitrates: boom in, 25, 201; decline in, 31; 

dependence on, 28; export of, 3, 22-25, 

141-42, 201; as percentage of gross 

domestic product, 141; taxes on, 25, 

141 

Nixon, Richard M., 48, 53, 265 
Noncommissioned Officers' School (Es- 
cuela de Suboficiales y Clases), 287, 311 
Norinco. See Northern Industrial Corpo- 
ration 

Norte Chico. See near north region 
Norte Grande. See far north region 
North, John, 27 

North American Free Trade Agreement 
(NAFTA), xlii, 192, 267 

Northern Industrial Corporation (Norin- 
co), 320 

North Korea. See Korea, Democratic Peo- 
ple's Republic of 

North Vietnam. ^Vietnam, Democratic 
Republic of 

Nunez Munoz, Ricardo, 247 

OAS. See Organization of American 
States 



449 



Chile: A Country Study 



oases, 70 

OECD. See Organisation for Economic 
Co-operation and Development 

Office of the Comptroller General of the 
Republic (Oficina de la Contralona 
General de la Republica),, 32, 214, 218, 
233-34, 296; powers of, 220, 233-34 

Oficina de la Contralona General de la 
Republica. See Office of the Comptroller 
General of the Republic 

O'Higgins Riquelme, Bernardo, 11, 13, 
280; exiled, 14; resignation of, 15; 
resistance to, 14-15; as supreme direc- 
tor, 14 

O'Higgins y Ballenary, Ambrosio, 11; re- 
forms under, 11 

Old Fatherland (Patria Vieja) (1810-14), 
13 

Onofre Jarpa, Sergio, 251 

Organic Code of the Tribunals, 232 

Organic Constitutional Law on Munici- 
palities (1992), 239-40 

Organic Constitutional Law on the 
Armed Forces (1990), 237, 296 

Organisation for Economic Co-operation 
and Development (OECD), 98 

Organization of American States (OAS), 
46 



Pachacuti Inca Yupanqui, 279 
Pakistan: materiel sold to, 320 
Panamanian Air Service, 323 
Pan American Health Organization, 106 
Pan American Highway (Longitudinal 

Highway), 177 
Paraguay: materiel sold to, 320; military 

training for, 289 
Paraguayan Air Force, 323 
Parliamentary Republic (1891-1925), 

27-31; corruption in, 28, 201, 231; 

criticism of, 30; economy under, 28; 

repression under, 30 
Parra, Violeta, 245 

Partido Alianza Humanista- Verde. See 
Humanist-Green Alliance Party 

Partido Cfvico Femenino. See Feminine 
Civic Party 

Partido Comunista de Chile. See Com- 
munist Party of Chile 

Partido Conservador. See Conservative 
Party 



Partido Democratico. See Democratic 
Party 

Partido Democrata Cristiano. See Chris- 
tian Democratic Party 
Partido Liberal. See Liberal Party 
Partido Nacional. See National Party 
Partido Obrero Socialista. See Socialist 

Workers' Party 
Partido por la Democracia. See Party for 

Democracy 
Partido Radical. See Radical Party 
Partido Social Democratico. See Social 

Democratic Party 
Partido Socialista. See Socialist Party 
Party for Democracy (Partido por la 

Democracia— PPD), 247-48 
Pascal Allende, Andres, 336 
Patria Vieja. See Old Fatherland 
Patria y Libertad. See Fatherland and 

Liberty 
patron-client relations, 5 
PCCh. See Communist Party of Chile 
PDC. See Christian Democratic Party 
peasants, 4, 20, 37, 40, 41, 42; literacy 

of, 90; support of, for Frei Montalva, 

44 

PEM. See Minimum Employment Pro- 
gram 

peninsular es: ethnic conflicts of, 8 

Pension Fund Administrators (Adminis- 
tradoras de Fondos de Pensiones — 
AFPs), 102, 187 

pension system, 100-103; choices in, 
101-2; costs of, 187-88; and health 
care, 103; instituted, 102; loans 
through, 107; payments by, 102-3; as 
percentage of gross domestic product, 
182, 188; privatization of, 101, 187; re- 
form of, xl, 101; regulation of, 187, 188 

Pentecostal Methodist Church, 123 

peonage, 3 

Perez Mascayano, Jose Joaquin, 21 

periodicals, 262 

Peron, Juan Domingo, 41 

Persian Gulf War, 324-25 

Peru: border with, 25, 64, 334; exports 
to, 10; immigrants from, 25-26; in- 
dependence of, 281; relations with, 278; 
territorial disputes with, 268, 277, 339; 
war with, 284 

Peru-Bolivia Confederation: destroyed, 
18, 263, 283; war against, 17, 282 

Peru-Bolivia Confederation War (1836- 



450 



Index 



39), 17, 263, 282-84 

Peru-Chile Trench, 64 

Peruvian Army, 284 

petroleum, 75, 170; consumption of, 173; 
exploration for, 173; imported, 170; na- 
tionalized, 142; pipelines for, 173; 
production of, 163, 170; reserves, 173 

Phelps Dodge, 165 

Physical Education School (Escuela de 
Educacion Fisica), 311 

Pico Canas family, 262 

Pilot Luis Pardo Villalon Antarctic Navi- 
gation School (Escuela de Navigacion 
Antartica "Piloto Luis Pardo Villa- 
Ion"), 312 

Pincheira, Antonio, 331 

Pincheira, Jose, 331 

Pincheira, Pablo, 331 

Pincheira, Santos, 331 

Pinera, Sebastian, 252 

Pinochet Ugarte, Augusto, xxxvi, 51, 
203-4; ambitions of, 204, 266; as army 
commander in chief, 216, 226-27, 237, 
278, 295; assassination attempt on, 
209, 246, 337; ousted in plebescite, 98; 
as president, 52-53, 199; resistance of, 
to opposition, 208 

Pinochet Ugarte administration {see also 
military junta), 3, 51-56; economic 
policies of, xxxvii-xxxviii, xxxix, 
149-58, 162; mining under, 164-65; 
opposition to, 55; privatization under, 
170; role of government under, 6; so- 
cial security under, 101 

Pinto Claude Group, 263 

Pinto Diaz, Francisco Antonio, 15-16 

Pinto Garmendia, Anfoal, 22 

Pizarro, Francisco, 7 

Pizarro Poblete, Eugenio, 254 

plebiscite of 1988. See election, plebiscite, 
of 1988 

poblaciones callampas (shantytowns), 86, 87; 

support of, for Alessandri, 41 ; support 

of, for Christian Democrats, 45 
POJH. See Employment Program for 

Heads of Household 
police, national. See Carabineros 
police, secret, 52, 204 
political activity: of armed forces, 3, 

32-34; of associations, 97, 98; cultural 

importance of, 241 
political demonstrations: under Allende, 

50; against Pinochet, 55, 208 



political parties (see also under individual par- 
ties), 4, 199, 201, 202, 241-42; associ- 
ations identified with, 97; banned, 3, 
52, 242; under constitution of 1980, 
207; identification with, 244; under 
military junta, 242; revived, 55 

political reform: obstacles to, xl 

political stability, xxxv, 16; under Ales- 
sandri, 44 

political system: corruption in, 8 

politicization, 5 

Politico-Strategic Advisory Council (Con- 
sejo Asesor Polftico-Estrategico — 
CAPE), 297-99 

Pontifical Catholic University of Chile 
(Pontifica Universidad Catolica de 
Chile), 115; television station of, 263 

Pontifica Universidad Catolica de Chile. 
See Pontifical Catholic University of 
Chile 

Popular Action Front (Frente de Accion 
Popular— FRAP), 42-43; formed, 42 
Popular Front (Frente Popular), 35, 245 
Popular Front government (1938-41), 
36-37 

Popular Unity (Unidad Popular), xxxv, 
46, 145, 202-3, 246; in elections of 
1973, 49-50; opposition to, 49; parties 
in, 46, 48, 145 

population, 81, 182; age distribution in, 
81-82; of Araucanians, 6; density, 81; 
of Easter Island, 67; percentage of, in 
industry, 37; percentage of, in Santia- 
go, 83-84; percentage of native Ameri- 
cans in, 80; of Punta Arenas, 75; of 
Santiago, 83, 84, 182; urban, 82-83, 
182; working-age, 183 

population statistics, 80-82; birthrate, 81; 
fertility rate, 81; gender ratio, 81; 
growth rate, 81, 84, 182; infant mor- 
tality rate, xxxix, 30, 54, 81; life expec- 
tancy, xxxix, 81; mortality rate, 81 

Portales Palazuelos, Diego, 17, 27, 282; 
killed, 18 

Portalian State (1830-37), 17-18; evalu- 
ation of, 19 

ports, 177-78; labor organizations in, 
29-30; modernization of, 18 

positivism, 124 

poverty, xxxix, xl, 30, 183-84; extreme, 

xxxix, xl, 183; reduced, 141 
PPD. See Party for Democracy 
Prat Chacon, Arturo, 25, 281, 285 



451 



Chile: A Country Study 



Prats, Carlos, 330 

pre-Columbian civilizations, 6-7 

president (see also executive branch), 
200-201; under constitution of 1833, 
18; under constitution of 1925, 32; 
under constitution of 1980, 205, 
220-25; election of, 221-22; as head of 
armed forces, 296-97; legislative 
authority of, 228; personal require- 
ments of, 221; powers of, 220, 221, 
222, 227; relations of, with Congress, 
230-31; succession to, 228; term of, 22, 
32, 201, 215, 221 

press (see also media; newspapers): censor- 
ship of, 17, 261 

prices: agricultural, 144; in urban areas, 
37 

Prieto Vial, Daniel, 319 

Prieto Vial, Joaquin: as president, 18 

prison camps, 291 

prisoners, 335-36; number of, 336; po- 
litical, 291 

prisons, 335-36; confinement in, 335; 
number of, 336; work in, 335-36 

privatization: of banks, 157-58; of ener- 
gy, 170; of pension funds, 187; under 
Pinochet, xxxviii, 53, 63, 101, 170 

Production Development Corporation 
(Corporacion de Fomento de la 
Produccion— Corfo), 37, 142, 218, 223, 
226 

productivity: increase in, 161 

Professional Institutes (Institutos Profe- 
sionales— IPs), 111, 116 

Programa de Empleo Mfnimo. See Mini- 
mum Employment Program 

Programa de Ocupacion para Jefes de 
Hogar. See Employment Program for 
Heads of Household 

Protestant churches: number of, 120; 
worship services in, 125-28 

Protestants, 122-23; and abortion, 130; 
and divorce, 129; increase in, 257; per- 
centage of, in population, 118, 257; 
practicing, 119, 257 

public order, 331-38 

public sector: under Allende, 219; em- 
ployment in, 217; expansion of, 217, 
218; under Pinochet, 219 

public works: promotion of, 34, 141 

Puebla Conference of Latin American 
Bishops (1979), 124 

Puerto Aisen, 74, 75 



Puerto Montt: port of, 178 
Puerto Williams naval base, 303 
Punta Arenas, 75; climate of, 75; oil ex- 
ploration in, 173; population of, 75; 
port of, 178; ship repair maintenance 
facilities, 321 
Punta Arenas naval base, 303 
Puro Chile, 261 



Quadragesima Anno (1931), 255 
Queen's Dragons, 326 
t Que PasaP, 262 



Radical Party (Partido Radical), 5, 28, 
241; associations identified with, 97; 
formed, 22; opposition of, to Alessan- 
dri, 35; opposition of, to Balmaceda, 
26; opposition of, to Roman Catholic 
Church, 4, 122, 255; political orienta- 
tion of, 34, 43; in Popular Front 
government, 36; in Popular Unity 
government, 46; social class member- 
ship in, 5, 28, 29; support of, for Ales- 
sandri, 30 

radio, 262-63 

Radio Agricultura, 262 

Radio Chilena, 262 

Radio Cooperativa, 262 

Radio Mineria, 262 

Radio Portales, 262 

Radio Tierra, 263 

railroads, 83, 174-77; modernization of, 

18, 177; under Montt, 21; regulation 

of, 174, 219 
Rapa Nui. See Easter Island 
Rapa Nui people, 79; as percentage of 

population, 80 
Reagan, Ronald, 265-66 
rebellion of 1851, 20-21; put down, 21 
rebellion of 1859, 21 
Recabarren Serrano, Luis Emilio, 28, 30 
recession, xxxix, 55, 92 
Reconquest (La Reconquista) (1814-17), 

13 

Red Televisiva Megavision, 263 
Regimiento de Carabineros. See Cara- 

bineros Regiment 
Regimiento Escuela de Artilleria. See Ar- 
tillery School 



452 



Index 



Regimiento Escuela de Caballeria Blin- 
dada. See Armored Cavalry School 

Regimiento Escuela de Fuerzas Especiales 
y Paracaidistas. See Special Forces 
School 

Regimiento Escuela de Infanteria. See In- 
fantry School 

Regimiento Escuela de Ingenieros. See 
Engineers' School 

Regimiento Escuela de Montana. See 
Mountain Warfare School 

Regimiento Escuela de Telecomunica- 
ciones. See Signals School 

Region Militar Austral. See Southern 
Military Region 

religion (see also under individual denomina- 
tions): freedom of, 122-23; historical 
perspective of, 120-25; popular beliefs 
in, 125-28; syncretic, 125 

religious affiliations, 118-20; of women, 
119-20 

Renewed Socialists, 247 

Renovacion Nacional. See National Re- 
newal 

Republican MDitia (Milicia Republicana), 
34 

Rerum Novarum (1891), 255 
research institutes, 117 
reservations, native, 25, 79 
retirement, 102 

Rettig Commission. See National Com- 
mission on Truth and Reconciliation 
Rio Bio-Bio, 72 
Rio Calle Calle, 72, 178 
Rio Group, 268 
Rio Lauca, 70 
Rio Loa, 70 

Rios Morales, Juan Antonio, 37-39 

Rio Treaty. See Inter- American Treaty of 
Reciprocal Assistance 

Rivera, Alonso de, 279 

rivers: in central Chile, 71; in far north, 
70; in near north, 71 

roads, 177; rural, 90 

Rodriguez, Manuel, 13 

Roman Catholic Church. See Catholic 
Church, Roman 

rural areas, 88-90; crime in, 331; edu- 
cation in, 80; labor unions in, 37, 38, 
39, 95; political orientations in, 43, 
256; workers in, 4, 20, 37, 40, 41, 42, 
45, 89 

rural enterprises, 89 



Rural Police Law (1881), 326 
rural-urban dichotomy, 5 



Samore, Antonio, 268 
San Antonio: port of, 178 
San Bernardo Prison, 336 
Sandok Austral of South Africa, 321 
San Martin, Jose de, 14, 280 
Santa Cruz y Calahumana, Andres de, 
18, 282 

Santa Maria Gonzalez, Domingo, 22 
Santiago: air pollution in, 193; city ser- 
vices in, 86; climate of, 71; distribution 
of social classes in, 84-86; founded, 7, 
83; growth of, 28, 84; housing in, 
86-87; migration to, 84, 86; population 
of, 83, 84, 182; public transportation 
in, 84, 86; roads in, 177; suburbaniza- 
tion of, 86 
Santiago College, 123 
Santiago International Airport, 178 
Schneider Chereau, Rene, 47 
School of Naval Engineering (Escuela de 

Ingenieria Naval), 302 
School of Operations (Escuela de Opera- 

ciones), 302 
schools: administration of, 112-14; and 
associations, 97; attendance in, 62; 
enrollment in, 108-14; for girls, 110; 
under Montt, 21; preprimary, 111-12; 
primary, 112-13; private, 110, 112-14; 
reforms in, 113-14; rural, 90; second- 
ary, 110, 112-14; state, 113; subsi- 
dies for, 112-13, 118; vocational, 110, 
114 

secularization, 22 

Security Assistance Institutions (Mutuales 

de Seguridad), 105 
Selkirk, Alexander, 67 
Senate, 225; designated senators, xlii, 
161, 207, 216, 226, 227, 294, 296; 
members of, 226 
Sernam. See National Women's Service 
Sernatur. See National Tourism Service 
service sector: employment in, 91 
Servicio de Aviacion Naval. See Naval 

Aviation Service 
Servicio de Seguro Social. See Social In- 
surance Service 
Servicio Nacional de la Mujer. See Nation- 
al Women's Service 



453 



Chile: A Country Study 



Servicio Nacional de Salud. See National 

Health Service 
Servicio Nacional de Turismo. See Na- 
tional Tourism Service 
shanty towns. See poblaciones callampas 
shipping, 83, 178; regulation of, 174 
ships: maintenance facilities, 321 
Signals School (Regimiento Escuela de 

Telecomunicaciones), 311 
Silva, Patricio, 107 

silver: export of, 3, 21; production of, 163 

Simpson, Roberto, 283 

Sisdef. See Defense Systems 

Sistema Nacional de Servicios de Salud. 

See National System of Health Services 
Sistemas Defensas. See Defense Systems 
slavery, 7, 8, 9, 11, 78; abolished, 15, 78 
smuggling, 10 

SNA. See National Agricultural As- 
sociation 
SNS. See National Health Service 
SNSS. See National System of Health 
Services 

Social Christian Conservative Party, 42 

social class: and associations, 97; as divi- 
sive factor, 5, 63 

Social Democratic Party (Partido Social 
Democratico), 248 

Social Insurance Service (Servicio de 
Seguro Social— SSS), 100-101 

socialism, 30 

Socialist Party (Partido Socialista), xli, 5, 
37, 39, 42, 43, 241, 264; under Allende, 
48; in elections of 1970, 46; in elections 
of 1993, xli; established, 33, 201, 247; 
factions in, 247; members of, 248; op- 
position of, to Alessandri, 35; under 
Pinochet, 52; political orientation of, 
34, 43, 245; in Popular Unity coalition, 
145; social class membership in, 5 
Socialist Republic of 1932, 33, 200 
Socialist Workers' Party (Partido Obrero 

Socialista), 245; founded, 28 
social organizations. See associations 
social programs, 160-61, 183-84, 245; 

emphasis on, 184, 193 
social question, 28, 30 
social reform: under Alessandri, 30, 31; 
under Frei Montalva, 202; under mili- 
tary junta, 199 
social security law of 1924, 32, 226 
social security system, 62, 100-103; un- 
der Aylwin, 63; expansion of, 100-101; 



health care under, 103; inequities in, 
100-101; under Pinochet, 101; priva- 
tized, xxxviii, 99, 101; reform of, 182; 
spending on, 99 

Sociedad de Fomento Fabril. See Indus- 
trial Development Association 

Sociedad General de Comercio. See 
General Society of Commerce 

Sociedad Nacional de Agricultura. See Na- 
tional Agricultural Association 

Sociedad Nacional de Mineria. See Na- 
tional Association of Mining 

Society of Equality, 20 

Sofofa. See Industrial Development As- 
sociation 

Sogeco. See General Society of Commerce 
Southeast Pacific Airline, 178 
Southern Cone Common Market (Mer- 
cado Comun del Cono Sur — Merco- 
sur), xlii, 192, 268 
Southern Highway (Gran Carretera Aus- 
tral), 177 

Southern Military Region (Region Mili- 
tar Austral), 297 

southern region (Sur de Chile), 72-74; cli- 
mate of, 72-74; immigrants in, 122; 
topography of, 72-74 

Southern University of Chile (Univer- 
sidad Austral de Chile), 115 

Soviet Union, 245; aid from, 48; materiel 
from, 318; relations with, 39, 46, 48 

Spain: immigrants from, 79; influence of, 
3; materiel from, 323; military train- 
ing for, 311 

Spanish Air Force, 323 

Spanish Civil War: neutrality in, 34 

Spanish conquest, 7-10 

Spanish language, 80 

Special Forces School (Regimiento Escue- 
la de Fuerzas Especiales y Paracaidis- 
tas), 311 

Specialists' School (Escuela de Especia- 
lidades), 312 

SSS. See Social Insurance Service 

State Bank of Chile (Banco del Estado de 
Chile), 218 

State Railroad Company (Empresa de 
Ferrocarriles del Estado), 177 

State Technical University (Universidad 
Tecnica del Estado), 115 

stock exchange, 173 

Strait of Magellan, 75, 277; oil explora- 
tion in, 173 



454 



Index 



strikes, 29-30; under Allende, 50; end of, 
186; under Pinochet, 54; replacements 
in, 186 

structural adjustment program, 147, 156- 

58; goals of, 157 
students: associations of, 97; opposition 

of, to Allende, 50; political activities of, 

47, 209; support of, for Alessandri, 30 
Subercaseaux Zafiartu, Benjamin, 63 
Submarine Command (La Fuerza de 

Submarinos), 303 
subsidies: of debtors, 156; education, 115; 

housing, 107, 108; military, 308-9 
Sucre, Antonio Jose de, 281 
suffrage. See voting 

Sumimoto Metal Mining Company, 165 
Supplies and Services School (Escuela de 

Abastecimientos y Servicios), 302 
Supreme Command of the Armed Forces 
(Comando Supremo de las Fuerzas 
Armadas— CSFA), 299 
Supreme Court, 232, 334; under Allende, 
231; under Aylwin, 233; functions of, 
232; members of, 232, 233; under mili- 
tary junta, 232; reform of, 233 
Sur de Chile. See southern region 
Switzerland: immigrants from, 79; 
materiel from, 320, 324 



Taiwan: military training for, 311 

Talcahuano: port of, 178 

tariffs. See customs duties 

taxes, 21; under Aylwin, xl, 93, 99, 219; 

local, 239; on nitrate exports, 25, 141; 

reform of, xxxviii, 45, 160-61 
TCE. See Electoral Certification Tribunal 
teachers: tenure for, 112; training of, 110, 

112, 1 14; working conditions for, 112, 

114 

Technical Training Centers (Centros de 
Formation Tecnica— CFT), 111, 116- 
17, 182 

telecommunications, 178-79; moderniza- 
tion of, 18; under Montt, 21; priva- 
tized, 179; reforms of, 178-79; service, 
179 

Telefonica. See National Telephone Com- 
pany of Spain 

Telephone Company of Chile (Compafria 
de Telefonos de Chile— CTC), 179 



Telephone Company of Coihaique (Com- 
pama de Telefonos de Coihaique), 179 
television, 263 

Television Nacional de Chile — Canal 7. 

See National Television Network of 

Chile— Channel 7 
Territorio Chileno Antartico. See Chilean 

Antarctic Territory 
terrorism, 246, 336-38; frequency of, 338 
Tlatelolco Treaty, 338 
Tocopilla electric power station, 170 
Tomic Romero, Radomiro, 46, 47, 249 
topography: of central Chile, 72; of far 

north, 69-70; of far south, 74-75; of 

near north, 71; of south, 72-74 
Torquemada Aeronaval Base, 303 
Toto, Horatio, 330 
tourism, 74, 180 

trade {see also exports; imports): with Ar- 
gentina, 11-12, 191; under Bourbon 
rule, 1 1-13; with Colombia, 191; with 
Europe, 12; with Japan, 267, 268; 
liberalization, 150; with Mexico, 191; 
policy, xxxix, 150-51, 191-92; with 
United States, 12, 31, 267; with 
Venezuela, 191 

Trade Union Confederation of Business 
Retailers and Small Industry of Chile 
(Confederation Gremial del Comercio 
Detallista y de la Pequeha Industria de 
Chile), 96 

transportation, 174-78; development 
of, 25; infrastructure, 174; investment 
in, 174; public, 84, 174; railroads, 83; 
reform of, 14, 174; regulation of, 174; 
rural, 90; water, 83; to work, 87 

Transport Force (La Fuerza de Trans- 
poses), 303 

treaties, 227, 230, 268 

Treaty of Ancon (1883), 22, 277 

Treaty of Mutual Defense (Bolivia-Peru), 
284 

Treaty of Paucarpata (1837), 282 
Treaty of Tacna-Arica. See Treaty of 
Ancon 

Treaty of Versailles (1919), 288 

Tribunal Constitucional. See Constitution- 
al Tribunal 

Tribunal de Certification Electoral. See 
Electoral Certification Tribunal 

Truck Owners Association (Asociacion 
Gremial de Duefios de Camiones), 257 

TV MAX. See Maxivision 



455 



Chile: A Country Study 



UCC. See Union of the Centrist Center 
UDI. See Independent Democratic Union 
Ultima Horn, 261 

unemployment, 182-83; under Alessan- 
dri, 34, 44; under Aylwin, 139, 183; 
under Ibanez, 33; under Pinochet, 3, 
92-93, 150, 156, 260; rate of, 90 

Unidad Popular. See Popular Unity 

Unidad por la Democracia. See Unity for 
Democracy 

Union de Centro Centre See Union of the 
Centrist Center 

Union Democrata Independiente. See In- 
dependent Democratic Union 

Union for the Progress of Chile (Union 
por el Progreso de Chile), xli 

Union of the Centrist Center (Union de 
Centro Centro— UCC), 241, 251-52, 
254 

Union por el Progreso de Chile. See Un- 
ion for the Progress of Chile 

Unitary Confederation of Labor (Con- 
federation Unitaria de Trabaj adores — 
CUT), 95-96, 259, 260 

Unitary Socialists, 248 

United Federation of Chilean Workers 
(Central Unica de Trabajadores de 
Chile— CUTCh), 43; outlawed, 54 

United Labor Confederation (Central 
Unica de Trabajadores — CUT), 95 

United Nations, 46 

United Nations Development Pro- 
gramme, xxxix, 99-100 

United Nations Economic Commission 
for Latin America (Comision Econom- 
ica para America Latina — CEPAL or 
ECLA), 146 

United Nations Economic Commission 
for Latin America and the Caribbean 
(Comision Economica para America 
Latina y el Caribe (EC LAC), 140, 
183 

United Popular Action Movement (Movi- 
miento de Accion Popular Unitario — 
MAPU), 46, 337 

United Popular Action Movement- 
Lautaro (Movimiento de Accion Popu- 
lar Unitario-Lautaro — MAPU-L), 
246, 337, 338 

United Provinces of the Rio de la Plata, 
280 

United States: advisers from, 38, 39; aid 
from, 38, 46; covert operations by, 49, 



265; exports to, 38, 168; influence of, 
3; investors from, 25, 27, 31, 39, 46; 
loans from, 38, 39; materiel from, 290, 
303, 317, 323; military assistance from, 
38, 317; military influence of, 289, 
290-91, 290-91; military training by, 
264; military training for, 311; relations 
with, 18, 34, 46, 48, 53, 56, 264-67; 
support of, for Balmaceda, 26; support 
of, for Frei Montalva, 44; trade with, 
12, 31, 38, 192, 266, 267 

United States Export-Import Bank, 37 

United States Federal Aviation Adminis- 
tration, 325 

Unity for Democracy (Unidad por la 
Democracia), 215 

Universidad Austral de Chile. See 
Southern University of Chile 

Universidad Catolica de Valparaiso. See 
Catholic University of Valparaiso 

Universidad de Chile. See University of 
Chile 

Universidad de Concepcion. See Univer- 
sity of Concepcion 

Universidad del Norte. See University of 
the North 

Universidad de San Felipe. See Universi- 
ty of San Felipe 

Universidad Tecnica del Estado. See State 
Technical University 

Universidad Tecnica Federico Santa 
Maria. See Federico Santa Maria Tech- 
nical University 

universities, xxxv, 115; enrollments in, 
111; inequities in, 113, 115, 117; pri- 
vate, 116; purged, 52, 115; reorgani- 
zation of, 115-16; subsidies for, 115, 
118, 230 

University of Chile (Universidad de 
Chile), 20; established, 62; student po- 
litical activities in, 29; television station 
of, 263; women in, 62, 131-32 

University of Concepcion (Universidad de 
Concepcion), 115 

University of San Felipe (Universidad de 
San Felipe), 115 

University of the North (Universidad del 
Norte), 115 

urban areas, 38, 82-88; communications 
between, 83; defined, 82; development 
of, 83; growth of, 28; labor organiza- 
tions in, 29-30; planning of, 83; popu- 
lation in, 82-83, 182; prices in, 37 



456 



Index 



urbanization: under Parliamentary Re- 
public, 28-30 
urban migration, 28, 82, 83, 84 

Valdivia, Luis de, 8-9 
Valdivia, Pedro de, 7, 279; killed, 7 
Valle Central. See Central Valley 
Valparaiso, 71, 84; Drake's raid on, 9; 

founded, 83; growth of, 28; port of, 178 
Vatican Council II, 124 
Venezuela: military training for, 289; 

trade with, 191 
Vicaria de la Solidaridad. See Vicariate of 

Solidarity 

Vicariate of Solidarity (Vicaria de la 

Solidaridad), 124-25, 256 
Viceroyalty of the Rio de la Plata (see also 

Argentina), 280; trade with, 11-12 
Vicuna Mackenna, Benjamin, 331 
Vietnam, Democratic Republic of (North 

Vietnam): relations with, 48 
volcanoes, 64-67 
voter registration, 210, 246 
voting, 35-36; expansion of, 200; by 

women, 4, 36, 242 

wages, 63; under Allende, 48, 145, 147, 
149; under Ayl win, 91, 139; depression 
of, 3; under Gonzalez, 40; indexation 
of, 153-54, 155, 185; under labor re- 
form, 161; minimum, 41, 226; real, 41 

War Academy (Academia de Guerra), 
277; founded, 287 

War College (Escuela Superior de 
Guerra— ESG), 311 

War of the Pacific, 22, 23-26, 64, 263, 
268, 277, 283-87 

wars of independence (1810-18), 13-14 

welfare system, xxxv, 4, 62, 98-108, 202, 
245; dismantled, 54; inequalities in, 62; 
in Popular Front government, 36 

wheat: export of, 3 



Wheelwright, William, 18 
wildlife, 74, 328 
Williams Rebolledo, Juan, 284 
wineries, 84, 163 

women: in armed forces, 310; in 
Carabineros, 328; education of, 62, 
131-32; employment of, 90, 131-32, 
133, 260; as mothers, 133; political ac- 
tivities of, 242-43; political affiliation 
of, 42, 242-43, 256; political influence 
of, 5; radio station for, 263; religious 
affiliation of, 119-20; rights of, 248; 
roles of, 132-33, 256-57; support of, 
for Alessandri, 44; voting by, 4, 5, 
242 

Women's Military School (Escuela Mili- 
tar Femenina), 311 

workers (see also under labor), 62-63; exploi- 
tation of, 3; income of, 40; minimum 
wage for, 41; political affiliations of, 5, 
42; repression of, 63; rights of, 32, 259; 
in rural areas, 4, 20, 37, 40, 41, 44, 45, 
89; violence against, 4 

Workers' Democratic Federation (Central 
Democratica de Trabajadores — CDT), 
260 

Workers' Federation of Chile (Federation 
Obrera de Chile— FOCh): formed, 30 

Workers' Security Fund (Caja del Seguro 
Obrero), 100 

work force, 90-84; participation rate, 90, 
183; women in, 90 

working class: under Allende, 48; de- 
mands by, 28; political affiliations of, 
43; support of, for Alessandri, 30 

working conditions, 63 

World Bank, 157, 159 

World War II: neutrality in, 38, 289 



Yugoslavia: relations with, 39 



Zaldfvar, Andres, 205 



457 



Contributors 



Paul W. Drake is Professor of Political Science, Department of 
Political Science; Adjunct Professor, Department of History; 
and Adjunct Professor, Graduate School of International Re- 
lations and Pacific Studies, University of California at San 
Diego, La Jolla, California. From September through Decem- 
ber 1993, he was a Visiting Scholar at the Instituto Juan March, 
Madrid, Spain. 

Alejandra Cox Edwards is Professor of Economics at California 
State University, Long Beach, and, in 1993-94, an economist 
with the World Bank, Washington, D.C. 

Sebastian Edwards is Henry Ford II Professor of International 
Business Economics in the John E. Anderson Graduate School 
of Management at the University of California, Los Angeles, 
and, in 1993-94, Chief Economist, Latin American Division, 
the World Bank, Washington, D.C. 

Adrian J. English is Defence Consultant and Analyst, Dublin, 
Ireland. 

Rex A. Hudson is Senior Research Specialist in Latin American 
Affairs with the Federal Research Division of the Library of 
Congress, Washington, D.C. 

Scott D. Tollefson is Assistant Professor of Comparative Politics 
and Latin American Studies in the Department of National 
Security Affairs at the Naval Postgraduate School in Monterey, 
California. From August 1993 through April 1994, he lived 
in Vina del Mar, Chile, while engaging in research as a Visit- 
ing Researcher at the Latin American School of Social Sciences 
(Facultad Latinoamericana de Ciencias Sociales — FLACSO) 
in Santiago, Chile. 

Arturo Valenzuela is Deputy Assistant to Assistant Secretary for 
Inter- American Affairs Alexander F. Watson, United States 
Department of State. Prior to assuming that position on Janu- 
ary 3, 1994, he was Director, Center for Latin American 
Studies, and Professor, Department of Political Science, at 
Georgetown University, Washington, D.C. 



459 



J. Samuel Valenzuela is Senior Fellow at The Helen Kellogg In- 
stitute for International Studies, University of Notre Dame, 
Notre Dame, Indiana, and Professor and Chair of Sociology 
at the University's Department of Sociology. From Septem- 
ber 30, 1992, until August 1993, he was a Visiting Fellow at 
Oxford University (St. Antony's College), Oxford, England. 



460 



Published Country Studies 



(Area Handbook Series) 



^o ^ 


Afghanistan 


J JU o / 


Greece 


550-98 


Albania 


550-78 


Guatemala 


550-44 


Algeria 


550-174 


Guinea 




Angola 


^0-89 

J JU 04 


VJU.yd.Ild. dllU. J_>CliZiC 


R^n 73 

j JU— / J 


Argentina 


^0- 1 ^ 1 

JJU I J 1 


Honduras 


^o 1 £Q 

J JU- 1 Ob> 


Australia 


^0 

JJU lDJ 


Hungary 


550-176 


Austria 


550-21 


India 


550-175 


Bangladesh 


550-154 


Indian Ocean 


^o 1 70 


Belgium 


j ju— jy 


Indonesia 


^ro 


Bolivia 


JJU oo 


Iran 


^o on 


jDrazii 


JJU J 1 


iracj 


^O 1 fift 
JJU— I Do 


Bulgaria 


JJU A J 


Israel 


550-61 


Burma 


550-182 


Italy 


550-50 


Cambodia 


550-30 


Japan 


^O- 1 &f> 


Cameroon 


JJU JT 


Jordan 


JJU 1 JC7 


Valletta 


J JU JU 


Kenya 


^0-77 


V^llllO 


J JU Ol 


I\UICd, 1NUXLI1 


550-60 


China 


550-41 


Korea, South 


550-26 


Colombia 


550-58 


Laos 


JJU J J 


\^UII1II1UI1 Wcdllil V_^dl lUUCall, 


550-24 


T pn '.3 n nn 
1-jCUa.IlUIl 




Islands of the 






550-91 


v>*ongo 


550-38 


T l npn a 
ijIUCI Id 


550-90 


Costa Rica 


550-85 


Libya 


550-69 


Cote d'lvoire (Ivory Coast) 


550-172 


Malawi 


550-152 


Cuba 


550-45 


Malaysia 


550-22 


Punri i «; 

v_ ' y i/l uo 


550-161 


^Mauritania 


550-1 58 

JJU 1 JO 


V> ZCCIlUolU V aJxla 


550-79 


\ A PVl rn 

1V1CAIUU 


S^O-^fi 

JJU JU 


Dominican Republic and 


JJU / u 


^/longolia 




naiti 






550-52 


Ecuador 


550-49 


Morocco 


550-43 


Egypt 


550-64 


Mozambique 


550-150 


El Salvador 


550-35 


Nepal and Bhutan 


550-28 


Ethiopia 


550-88 


Nicaragua 


550-167 


Finland 


550-157 


Nigeria 


550-155 


Germany, East 


550-94 


Oceania 


550-173 


Germany, Fed. Rep. of 


550-48 


Pakistan 


550-153 


Ghana 


550-46 


Panama 



461 



550-156 


Paraguay 


550- 


-53 


Thailand 


550-185 


Persian Gulf States 


550- 


-89 


Tunisia 


550-42 


Peru 


550- 


-80 


Turkey 


550-72 


± 11111 UL/lllCo 


550- 


-74 


T Toran r\ a 
KJ tdcLlHJLcL 


550-1 69 


Poland 

IT UldllU 


550- 


-97 


1 I i~i i cri lav 
\J l Hid Uldy 


550-181 


Portugal 


550- 


-71 


Venezuela 


550-160 


Romania 


550- 


-32 


Vietnam 


550-37 


Rwanda and Burundi 


550- 


-183 


Yemens The 


550-51 


Saudi Arabia 


550- 


-99 


Yugoslavia 


550-70 


Senegal 


550- 


-67 


Zaire 


550-180 


Sierra Leone 


550- 


-75 


Zambia 


550-184 


Singapore 


550- 


-171 


Zimbabwe 


550-86 


Somalia 








550-93 


OUUlll /ill ICa. 








550-95 


Soviet Union 








550-179 


Spain 








550-96 


Sri Lanka 








550-27 


Sudan 








550-47 


Syria 








550-62 


Tanzania 









462 



PIN: 004252-000 



